Laura Sanicola and Jarrett Renshaw

WASHINGTON – U.S. 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 traders’ reaction has meant that sanctions against Russia have been more damaging than they were expected to be for energy markets after the invasion of Ukraine. Even though Russia’s invasion of Ukraine has caused crude futures to soar above $100 per barrel, the United States and NATO allies are not blocking Russian oil sales. They worry about inflation.

Russian barrels have not been touched by the public. While you might see some Russian barrels on the waters right now, these were acquired prior to the invasion. There won’t be much after that,” said one New York Harbor trader. He said, “No one would like to be seen funding war against the Ukrainian people with Russian products.”

The administration of President Joe Biden has said it would block Russian oil from the United States if Russia continued its aggression against Ukraine. Individual traders, as well as company executives in New York City and around the U.S. Gulf hubs expressed concern that the White House may authorize more moves. They also don’t want to be seen funding the invasion.

Russia is one the most important oil exporters in the world. They send 4 to 5 millions barrels per day and 2 to 3-million barrels per hour of refined products to foreign markets. Last week, Russia invaded Ukraine. This prompted international condemnation and sanctions. Moscow describes the operation as a “special operations.”

Financial matters are another. Russian oil companies are having difficulty finding bidders to ship their oil or to transport it, since the United States and allies have blocked access to certain Russian banks to SWIFT.

Washington and its allies are yet to publish a list listing which banks will be affected by SWIFT Block, an incontinence that has driven potential buyers away from the market.

According to U.S Energy Department data, the United States bought an average of 76,000 barrels per day from Russia in 2020. This is less than it purchased from many other countries, including Canada and Mexico. Based on data from traders, and Refinitiv Eikon ship tracking systems, the United States ranks as the largest importer and exporter of Russian fuel and vacuum oil.

Sarah Emerson (NYSE :), President at ESAI Energy said that it is not surprising that Russian oil traders and refiners avoid Russian oil due to lack of clarity about sanctions on banks and other measures making it more difficult to enact transactions.

According to initial ESAI estimates, 10% of Russia’s oil exports are affected. 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.

Millions of barrels of Russian crude oil have been left in the limbo by aversion to Russian oil. Due to falling prices, trading merchants struggled to sell Urals crude cargoes that were ready for loading at Russia’s Baltic port in March.

According to shipbrokers, one Russian oil tanker, NS Concord is docked at the U.S. Gulf Coast. It hasn’t been attached to any trading or oil company, and it remains there for the moment.

Reuters speaks to Asian oil traders that they want more information from the banks and government about Russian oil cargoes.