Oil Prices Surge, World Leaders Discuss Coordinated Efforts to Feed Supply

Oil prices spiked Tuesday, surpassing $100 a barrel, as Ukrainian President Volodymyr Zelensky called Russia a "terrorist state" after attacks on residential areas of Kharkiv, the country's second-largest city.

U.S. benchmark crude oil hit its highest level since 2014. If barrel prices continue to increase, Americans could see gas prices of $5 a gallon or more.

Russia produces about 10 million barrels of oil every day, which makes up about 10 percent of the world's demand. As countries continue to sanction Russia, the ripple effects will be felt around the world.

International Energy Agency members were meeting Tuesday to discuss potential solutions and decided to release 60 million barrel from stockpiles to try to cool prices.

Tamas Varga, an analyst at PVM Oil Associates, told Reuters that the U.S. is also coordinating a strategic petroleum reserve (SPR) release to help alleviate the situation. The reserve currently contains about 606 million barrels, which is just enough to meet a month's worth of the country's oil demand. Other IEA member nations also have their own oil reserves.

In a report, Anderson Alves of ActivTrades said that "the market's focus will continue to be on geopolitical tensions, at least in the short term," according to the Associated Press.

The Organization of the Petroleum Exporting Countries (OPEC) and some other producers, including Russia, plan to meet Wednesday, Reuters reported. Member countries include mostly African and Middle Eastern countries, as well as Venezuela.

Varga told Reuters they will likely stick to their plan of increasing production by 400,000 barrels per day every month, which "will not alleviate fears."

According to GasBuddy, this is the ninth week in a row of U.S. average gas prices rising. Patrick De Haan, head of petroleum analysis at GasBuddy, said in a release that the time of year and the Russian invasion are creating the "perfect storm" for U.S. gas prices.

"The Russian invasion of Ukraine has sparked high-level concern that oil production could eventually be stifled, or even sanctioned, from the world's second-largest oil producer, leading to less supply as demand grows," De Haan said.

"That possibility has pushed up the national average price of gasoline considerably in the last week, and the situation could worsen at any time, keeping gas prices elevated for the foreseeable future."

Update 3/1/22, 11:32 a.m. ET: This story was updated with additional information.

Gas station, Bethesda, Maryland
Oil prices exceeded $100 per barrel Tuesday as Russia's attacks on Ukraine continue. Above, gas stations in Bethesda, Maryland, on February 23, 2022. Photo by Mandel Ngan/AFP via Getty Images