WASHINGTON, March 2 ― US traders in the nation’s largest oil hubs have cautiously put imports from Russian companies on hold, even though the White House has said oil sales are not the target of sanctions.

The response from traders means sanctions have disrupted energy markets more than expected following Russia's invasion of Ukraine. Crude futures have soared above US$100 (RM419.26) a barrel even though the United States and its Nato allies have not yet blocked Russian oil sales, worried it could feed inflation.

President Joe Biden's administration has stated it could block Russian oil if Russia continues its aggression against Ukraine. Some lawmakers from both major US political parties are pressing for an outright ban on Russian imports, but cutting off that supply could cause US gasoline prices to surge ― while Russia keeps selling oil to China or other nations.

Company executives and individual traders at hubs in New York and the US Gulf say they are worried Washington could authorise additional moves, and also do not want to be seen as funding the invasion.

“People are not touching Russian barrels. You may see some on the water right now, but they were bought prior to the invasion. There won’t be much after that,” said one New York Harbour trader. “No one wants to be seen buying Russian products and funding a war against the Ukrainian people,” he added.

Russia is one of the world's largest petroleum exporters, sending 4 to 5 million barrels per day of oil and 2 to 3 million bpd of refined products to other markets. The country invaded Ukraine last week, drawing international sanctions and worldwide condemnation. Moscow calls the action a “special operation.”

Senator Ed Markey, a Democrat from Massachusetts, said US purchases of Russian oil in 2021 would have delivered an estimated US$17.4 billion to that nation. “We cannot criticise Europe for its reliance on Russian energy, as we pour dirty oil money into Russia,” he said in a Tuesday statement.

Buyers waver

Since the United States and its allies blocked certain Russian banks' access to the SWIFT payment system that helps international trade flow smoothly, Russian companies have struggled to find bidders for their oil and tankers to transport it.

Washington and allies have yet to release a list of which banks will be impacted by the SWIFT block, an uncertainty that has pushed possible buyers from the market.

The United States on average bought about 76,000 barrels of crude a day from Russia in 2020, according to US Energy Department data, less than what it bought from several countries including Canada and Mexico. The United States is a leading importer of Russian fuel oil and vacuum gas oil VGO, according to data from traders and Refinitiv Eikon vessel tracking systems.

Sarah Emerson, president at ESAI Energy, said it was not surprising that trading houses and refiners are shunning Russian oil, given lack of clarity around sanctions on banking and other measures that make it harder to enact transactions.

About 10 per cent of Russia's oil exports have been hit, initial ESAI estimates show. But Russia’s large footprint in the global market makes it unlikely that it could be frozen out entirely.

“The big players can be out of the market, but there’s not enough oil out there for everyone to get out,” Emerson said.

Aversion to Russian oil has left millions of barrels of Russian crude in limbo. Trading merchants have struggled to sell Urals crude cargoes for loading in mid-March from Russia's Baltic ports as prices dropped to their lowest level in the post-Soviet period.

One Russian oil tanker, the NS Concord, is currently docked off the US Gulf Coast and has not been fixed to any oil company or trading house, according to shipbrokers.

Asian oil traders Reuters spoke to say they are still waiting for more clarity from banks and their respective governments on whether they can buy Russian oil cargoes. ― Reuters