Ron Bousso and Julia Payne by Dmitry Zhdannikov

LONDON, (Reuters) – The Russian oil market was in chaos Tuesday after producers delayed sales and importers refused Russian vessels. Buyers worldwide looked elsewhere for the needed crude following a raft sanctions imposed by Moscow in response to the conflict in Ukraine.

Following Russia’s incursion into Ukraine, a number of countries imposed severe sanctions on Russian banks and companies. Global majors also announced that they would be leaving Russia with multimillion-dollar contracts.

Even though the sanctions are not directed at oil trading, there have been buyers from Asia, Europe, and North America that have disappeared, sending global benchmarks of over $100 per barrel.

Russia is second in the exportation of crude oil worldwide after Saudi Arabia. The country ships approximately 4 to 5million barrels daily of crude and 2 to 3,000,000 barrels of refined product. Major producers are struggling to keep pace with rising demand, and market participants fear for the future.

All over the oil markets on Tuesday were feeling the knock-on effect of sanctions. Russia’s Urals key oil grade was offered at $18 less than physical, which is a new record for the post-Soviet period. The traders were unable to find buyers even at this price.

Russian oil trader said that nobody wants to “buy, store or ship Russian oil.”

Futures traders pushed Brent futures prices to $15 more than futures contracts for oil delivery six months in the future. It’s also an unprecedented price, which is indicative of rising worries about tight supplies.

In the chaos, even non-Russian crude oil was caught. Five traders speaking with Reuters stated that they are avoiding oil from the CPC pipe, which supplies more than 1 million barrels a daily from Kazakhstan or more than 1% of the world’s supply – due to the possibility it mixes with Russian grades, and ends at a Russian port in the Black Sea.

It’s an essential source of oil supply, supplying over one million barrels per day to a world that urgently needs it. Chevron Mike Wirth (NYSE:), CEO, said during a Tuesday conference call with reporters. Chevron owns a 15% interest in CPC as well as a 50% share in Tengizchevroil, which is developing western Kazakhstani fields.

Sources close to the matter reported that BP (NYSE;), Equinor (LON:); and Shell (LON 🙂 are abandoning multibillion-dollar Russian positions. BP also cancelled its Russian Black Sea fuel oil loadings, while Equinor and Shell have resigned. U.S. titans will be closing down their Russian Black Sea port of Taman on Tuesday Exxon Mobil (NYSE:) stated that it would be removing U.S. workers from Russia, even though the company has yet to say it will cease operations.

Buyers from all over the world tried to obtain supplies from abroad. Bharat Petroleum Corp of India, which purchases approximately 2,000,000 barrels of Russian Urals per month, seeks more oil from Middle Eastern countries for April. Canada announced Monday that it will ban Russian oil imports.

U.S. trader have begun to avoid Russian barrels while Asian buyers waited for clarity from the banks about whether or not they could transact with Russian sellers.

According to the Malaysian government, a Russian-flagged tanker that was targeted by U.S. sanction will be denied entry at Kuala Linggi port.

The European Union is considering banning Russian ships from entering European Union ports. Britain announced Monday that it will block all Russian-owned, operated, controlled and chartered ships from entering British ports.

The International Energy Agency (IEA), in response to severe disruptions, announced that it would coordinate the release of 60,000,000 barrels oil reserves from large consumers. Half of these will come from the United States. Markets responded to the announcement by rallying further. They saw it as a sign of the global supply crunch.

Russia is expected to increase supplies to China. Transneft is the Russian oil pipeline monopoly and handles over 80% of Russia’s total oil production. According to TASS news agency, Transneft plans to boost supplies to China through its ESPO pipeline to 2.48million tonnes this month, up from 2.22million tonnes in February.