Brent crude, the international benchmark for oil prices has hit $110 a barrel, marking the highest level seen in more than seven years.
Oil prices surged despite new measures aimed at calming markets worried by the invasion of Ukraine.
It rose even after the International Energy Agency’s members agreed to release 60 million barrels of oil from emergency stockpiles.
Russia is one of the biggest energy producers in the world.
As a result, concerns about Russia’s invasion of Ukraine have sparked concerns among investors that oil or gas supplies could be affected.
Meanwhile, the price of US oil – West Texas Intermediate crude – rose to almost $109 a barrel.
The United States and 30 other member countries of the International Energy Agency (IEA) agreed to release the oil in a bid to stabilize energy markets worldwide.
Yesterday, White House spokeswoman Jen Psaki said, “We are prepared to use every tool available to us to limit disruption to global energy supply as a result of President Vladimir Putin’s actions.”
She added that Washington would carry on looking at how to speed up moving energy supplies away from Russia.
Another statement by the IEA noted that the invasion of Ukraine came against a “backdrop of already tight global oil markets, heightened price volatility, commercial inventories that are at their lowest level since 2014”.
Petrol price movements in the UK are mainly determined by the price of crude oil, which is the raw material for fuel, and the exchange rate between the dollar and the pound, because oil is traded in dollars.
On Monday, the RAC said the average price of petrol had jumped to a record high of £1.51 a litre on Sunday, while diesel increased to £1.55.
Jay Hatfield, chief investment officer at ICAP, said the “dramatic” price increases seen globally were unlikely to persist though if the situation in Ukraine becomes more stable.