Despite fresh efforts aimed at soothing markets concerned about the invasion of Ukraine, oil prices have risen.
Brent crude, the international benchmark for oil prices, has surpassed $110 a barrel for the first time in over seven years.
Even after members of the International Energy Agency decided to release 60 million barrels of oil from emergency inventories, the price climbed.
Russia is one of the world’s largest energy producers.
As a result, investor concerns over Russia’s invasion of Ukraine have spurred fears that oil and gas supplies may be disrupted.
Meanwhile, the price of US crude – West Texas Intermediate – has risen to about $109 per barrel.
The United States and 30 other International Energy Agency (IEA) member countries agreed to release the oil in order to help stabilize global energy markets.
On Tuesday, White House spokeswoman Jen Psaki stated, “We are prepared to utilize every option available to us to reduce interruption to global energy supplies as a result of President Vladimir Putin’s actions.”
She went on to say that Washington will continue to look for ways to move energy supplies away from Russia more quickly.
The invasion of Ukraine occurred against a “backdrop of already tight global oil markets, heightened price volatility, and commercial inventories at their lowest level since 2014,” according to another IEA statement.
Because oil is traded in dollars, the price of crude oil, which is the raw material for fuel, and the exchange rate between the dollar and the pound, influence the price of gasoline in the United Kingdom.
The RAC said on Monday that the average price of petrol had risen to a new high of £1.51 per litre on Sunday, while diesel had risen to £1.55.
The “dramatic” price hikes observed throughout the world, according to Jay Hatfield, chief investment officer at ICAP, are unlikely to last if the situation in Ukraine improves.
On Tuesday, stock prices in Europe and the United States plunged even more as attacks on Ukrainian cities continued.
Fears over the consequences of the prolonged battle weighed heavily on markets in the United States, Europe, and the United Kingdom.
Following warnings about the impact of Western sanctions on Moscow and signals that Russia was speeding up its invasion of Ukraine, the FTSE 100 went negative.
Western nations have placed harsh penalties on Moscow, with a slew of firms, including BP and Shell, stopping operations and investment in Russia.
Eni, the Italian oil behemoth, also announced plans to sell its Blue Stream pipeline share. Eni and Russian energy giant Gazprom hold the pipeline that transports Russian gas to Turkey.
On Tuesday, TotalEnergies, a French oil and gas company, said that it will no longer invest in new projects in Russia.
Frankfurt saw greater losses, which experts attributed to Germany’s reliance on Russian energy imports.
However, Russia’s ruble remained firm after plunging 30% to historic lows versus major currencies on Monday. In Tuesday’s market, one rouble was worth less than one US penny.
The rouble’s depreciation reduces its purchasing power and has a negative impact on ordinary Russians’ savings. Only after Russia’s central bank increased interest rates to make the currency more appealing to investors did the drop come to an end.
The central bank’s access to a large portion of Russia’s vast reserves of money housed in foreign currencies has been hampered by the sanctions’ stranglehold on Moscow’s finances.
“This is a fast-moving issue,” said Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown. “Investors should be aware of potential share price volatility in the short to medium term.”