Tamoil had asked a court in Rotterdam to rule on the legality of Shell’s decision to stop supplying the petrol stations, which operate under the Shell brand but which are owned by Tamoil.

Tamoil is not on US or European Union sanctions lists, and argues it should not be affected by measures taken to cut off funds for Muammar Qaddafi’s regime in Libya. This had failed to convince Shell, which considered it a state-controlled entity.

But in a statement on Thursday, Tamoil said it had provided Shell with sufficient assurances that it was complying with sanctions, clinching a deal that ended legal proceedings and allowed the supply of petrol to resume.

A Shell spokesman in The Hague confirmed that an agreement with Tamoil had been reached, as the Anglo-Dutch oil major had been convinced that it would be complying with EU sanctions against Libya if it makes deliveries to Tamoil.

“We are pleased with the outcome. Shell and Tamoil Netherlands have been business partners for many years,” said Peter Etman, a director at Tamoil Netherlands.

Tamoil had brought in KPMG to audit its money trail, Etman added.

At the end of 2009, Tamoil operated 2,881 service stations in Europe, including 400 in Germany, and had a nationwide presence of around eight percent in Italy.