MOSCOW/LONDON (Reuters) -Buyers of Russian oil have faced difficulties over payments and availability of vessels after imposition of Western sanctions against Moscow over Ukraine, traders said on Monday, while BP (NYSE:BP) Plc has cancelled fuel oil loadings from a Black Sea port.
The West has introduced sweeping sanctions, including on the banking sector, after Russia's invasion of Ukraine. Russia calls its action a "special operation" to disarm Ukraine.
The United States and its allies on Saturday moved to block certain Russian banks' access to the SWIFT international payment system that helps international trade flow smoothly.
Confusion over the sanctions was highlighted by Russian oil producer Surgutneftegaz, which did not award its spot tender for 200,000 tonnes of Urals oil from Baltic ports in March as the company received no bids from buyers.
Surgutneftegaz issued another tender for 800,000 tonnes of March Urals.
"It's possible to charter oil tankers for Black Sea exports, but rates are as high as 500 Worldscale points," a source involved in Russian oil trading said about a unified system of establishing payment of freight rate.
Freight costs for Russian oil delivery had spiked fivefold in the Black Sea region within a week, traders said, discouraging regular buyers of Urals and CPC Blend.
"We see a huge increase of the freight costs and are waiting feedback from our banks", a source with large European refiner told Reuters.
Traders said Russian oil buyers had struggled to find vessels in the Baltic Sea for cargoes loading after March 10.
"We have ships for the closest dates, but we have no clue how we will load cargoes in mid-March," said a source at a large buyer of Russian Urals oil.
Another trader said that market participants are still trying to figure out what their sanctions exposure might be and have kept trade to a minimum for the time being.
Britain on Monday ordered its ports to block any vessels that are Russian-flagged or believed to be registered, owned or controlled by any person connected with Russia making logistics even more difficult.
At the same time, BP has cancelled all of its fuel oil loadings from the Russian Black Sea port of Taman due to Russia's invasion of Ukraine, sources familiar with the matter said.
BP was due to load a 60,000-tonne cargo of fuel oil on March 5, according to the sources and a loading list for the port. The cargo was cancelled even though a tanker was found to load the oil.