Oil prices have risen to a 7-year high after an agreement was reached to release 60 million barrels of emergency oil to ease fears over the effect of the Russian attacks in Ukraine on oil prices.
The International Energy Agency announced Tuesday that its members had agreed to release oil from its emergency reserve to send a “strong message to global oil markets that there will be no shortfall” despite the Russian invasion.
About 30 million barrels will come from the U.S. Strategic Petroleum Reserve, CNN reported.
Despite the announcement, the price of oil hit a 7-year high to $105.14 a barrel for US crude oil. The cost of Brent crude hit $105.40.
But the Startegic Petroleum Reserve is designed to be a band-aid when oil supplies are threatened, CNN reported.
The Organization of the Petroleum Exporting Countries, more commonly known as OPEC, and other producers, including Russia, are scheduled to meet Wednesday, Reuters reported.
Oil market analysts say oil costs could continue to rise.
“The fragile situation in Ukraine and financial and energy sanctions against Russia will keep the energy crisis stoked and oil well above $100 per barrel in the near-term, and even higher if the conflict escalates further,” Louise Dickson, of Rystad Energy wrote, according to Reuters.
Oil and gas companies such as BP and Shell have said they will exit their Russian operations, Reuters reported.
Russia exports between 4 and 5 million barrels per day of crude oil and 2 to 3 million barrels per day of refined products.