HomeNewsExxon Mobil Announces Exit From Russian Oil and Gas Operations Amid Ukraine Invasion

Exxon Mobil Announces Exit From Russian Oil and Gas Operations Amid Ukraine Invasion

by Shelby Scott
(Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Exxon Mobil just joined a growing collective of internationally renowned oil companies pulling out of Russia due to the ongoing invasion of Ukraine. The decision, however, will see the company leave more than $4 billion in assets.

The announcement went public Tuesday. The move will see Exxon let go of its management of the facilities on Sakhalin Island, to Russia’s Far East. Additionally, the move puts a proposed multibillion-dollar liquid natural gas facility in jeopardy. Exxon’s decision came as a result of rising pressure to cut its ties with the aggressor nation.

Nevertheless, Exxon emphasized, “We deplore Russia’s military action that violates the territorial integrity of Ukraine and endangers its people.”

Nevertheless, the decision appears detrimental to Exxon’s stakes. However, the company added in its statement, “Exxon’s Russian business is relatively small in the context of its wider enterprise, so it does not have the same significance as it has to BP or TotalEnergies, if it were to abandon its Russian assets.”

Regardless, the outlet reports the Sakhalin gas and oil facilities represent one of the largest single direct investments in Russia. The claim saw support from a project description on Exxon’s website.

Alongside abandoning its joint endeavors in Russia, the company sent a plane to evacuate its American employees. However, Reuters did not report an exact number of evacuees.

Exxon’s withdrawal from its Russian holdings follows that of other well-known gas and oil companies including Shell and BP. That’s in addition to non-affiliated companies such as Apple, Ford, and General Motors.

American Oil Prices Skyrocket Amid Russian Invasion

While oil companies’ abandonment of their Russian assets serve to back their support of the Ukrainian people and disrupt the flow of finances within the massive nation’s economy, the result of that decision recently witnessed oil prices in the U.S. jump to a seven-year high. The increase in price also comes as a result of fear of a widespread shortage.

On Tuesday, CNBC reported the price per gallon for crude oil skyrocketed, well surpassing $100 a barrel. Prices exceeded the $100 mark last week. Now, as American ties with Russia’s oil and energy production industry dwindle, fears of a shortage intensify.

As a result of surging prices and fears of a shortage, the International Energy Committee agreed to release 60 million barrels from its global reserves.

The agency’s release of the stockpiled barrels is historic as the outlet reported this has only occurred four times since the IEC’s inception.

Of the worsening situation, IEC executive director Fatih Birol said, “Global energy security is under threat, putting the world economy at risk during a fragile stage of recovery.”

Even worse, economists have already stated the 60 million barrels will do little to ease the situation. Some have already stated prices for oil will increase to $110 by this year’s second quarter.