NEW YORK, March 19 (Reuters) - Workers at BP's Whiting, Indiana, refinery began picketing on Thursday after the British oil major barred more than 800 union members from entering the facility, following months of stalled contract negotiations.

The labor dispute at Whiting, the Midwest's largest refinery, comes at a time of elevated gasoline and diesel prices as the Middle East war disrupts global energy supplies.

Any operational disruptions could exacerbate an already tight fuel market and push prices even higher. The 440,000 barrel-per-day refinery produces transportation fuels including gasoline, diesel and jet fuel.

"At midnight, British Petroleum chose to lock out our 800+ union members, because we would not agree to their demands to eliminate more than 100 local jobs, cut our wages and give up our bargaining rights," USW 7-1 said in a Facebook post.

Union workers began picketing outside the Whiting refinery at midnight on Thursday.

BP said it does not foresee impacts on refinery operations or production, adding it remains willing to negotiate with United Steelworkers representatives.

The company said it rejects any presumption that the lockout is unjustified.

The previous three-year collective bargaining agreement expired on January 31. USW 7-1 had been working under rolling 24-hour extensions of their previous agreement.

Earlier this week, the company notified the United Steelworkers of its decision to lock out workers starting Thursday, after the union overwhelmingly rejected its "last, best and final" offer.

The union has said BP proposed to cut more than 100 union jobs, reduce pay in nearly all positions and strip away bargaining rights.

BP is also pushing Whiting workers to sign a six-year contract, twice the length of the previous agreement.