KUALA LUMPUR: Malaysian palm oil futures rose more than 4% on Thursday, hovering near record highs, on expectations that buyers would turn to the tropical oil to compensate for a halt in Black Sea sunflower oil exports disrupted by the Russia-Ukraine crisis.

Export backlog in Indonesia due to the Domestic Market Obligation requiring cooking oil producers to sell 20% of their products locally also underpinned prices.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 290 ringgit, or 4.35%, to 6,950 ringgit ($1,659.11) a tonne by the midday break, up for a third session in four.

Top buyer India has asked Indonesia to increase palm oil shipments to the country and to temporarily lower its biodiesel blending rules, to compensate for a loss of sunflower oil supplies from the Black Sea region.

The United States is preparing a sanctions package targeting more Russian oligarchs as well as their companies and assets, two sources familiar with the matter said on Wednesday, as Washington steps up pressure on Russian President Vladimir Putin over Moscow's invasion of Ukraine.

Ukraine has suffered damage to its ports and other export facilities, while Western sanctions have hit Russian supplies, raising concerns over long-term supply disruptions.

"Even if the war stops, sanctions on Russia may not be lifted immediately. It would take some time for the ports to reopen and the next sunflower planting may not be up to the usual pace," UOB Kay Hian said in a note.

"There is also market talk that the Indonesian government may relook into lowering the percentage of domestic sales from the current 20% once the cooking oil shortage in Indonesia eases," it added.

Meanwhile, soyoil prices on the Chicago Board of Trade rose 0.7%. Dalian's most-active soyoil contract were up 1.1%, while its palm oil contract 3%.