Oil prices surged 9% today, as a global agreement to release crude reserves failed to calm fears about supply disruptions from Russia's invasion of Ukraine, and instead underscored concerns about growing disruptions.
Members of the International Energy Agency (IEA), which include the United States and Japan, agreed to release 60 million barrels of crude from their reserves to try to quell the sharp increase in prices that has pushed major benchmarks past $100 a barrel.
However, the news of that release - equivalent to less than one day of worldwide oil consumption - only underscored the market's fear that supply will be inadequate to cover growing disruptions to the crude market.
Brent futures rose $8.80, or 9%, to $106.77 a barrel by 1643 GMT, heading for their biggest daily percentage gain since March 2021.
US West Texas Intermediate (WTI) crude rose $9.89, or 10.3%, to $105.61, on track for its biggest daily percentage gain since May 2020.
Brent hit its highest since July 2014 and WTI its highest since June 2014. In addition to crude, US distillates and gasoline futures also hit their highest since 2014.
"Oil's climbing the Ukraine war wall of worry," said John Kilduff, partner at Again Capital in New York. He said traders could be disappointed in the size of the release of strategic reserves.
US-led sanctions on Russia have largely not specifically targeted the energy sector, but traders are shying away from trading Russian barrels, leading to big discounts on that oil and tightening supply for other kinds of crude.
Russia exports 4 million to 5 million barrels per day (bpd) of crude and 2 million to 3 million bpd of refined products. Buyers of Russian oil are facing difficulty over payments and vessel availability owing to sanctions, with BP cancelling fuel oil loadings from a Russian Black Sea port.
The world's biggest shipping firm, Maersk, was halting container movement to and from Russia, while Britain has banned all ships with any Russian connection from entering its ports.
Major oil and gas companies, including BP and Shell, have announced plans to exit Russian operations and joint ventures, while TotalEnergies said it would not invest further capital in its Russian operations.
The largest supplier of global oil, the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, have not signaled a desire to boost production despite entreaties from the United States and others.
The group is due to meet on Wednesday for a monthly meeting.
"OPEC(+) will likely stick to its original plan of a monthly 400,000 barrels per day (bpd) increase, which will not alleviate fears," said Tamas Varga at PVM Oil Associates.
