'Emergency' and 'bedlam': Urgent calls for countries to release oil reserves amid sky-high prices

Soaring energy prices and supply issues are leading to calls for the United States and other countries around the world to release more of their oil reserves.

Oil and natural gas prices continue to climb as Russian supplies are diminished in the wake of the country's invasion of Ukraine.

North American oil prices jumped to nearly $120 US per barrel on Monday, a sizable increase compared to $75 at the beginning of January and about $60 one year ago.

"There's no cushion in the system as we get more interruptions from Russia," said John Hess, the chief executive of Hess Corp., a New York-based oil company. He made the comments during one of the opening events of CERAWeek by S&P Global, one of the largest energy conferences in the world, which began Monday.

"This is an emergency. I think it's time that the IEA (International Energy Agency) and the U.S. release 120 million barrels out of the strategic reserves and commit to doing another 120 million barrels next month and say more is coming if needed," he said.

Last week, the U.S. and other member states of the IEA agreed to release 60 million barrels of oil reserves to compensate for supply disruptions following Russia's invasion of Ukraine. Hess said those volumes are inadequate.

The chief executive of Malaysian state oil firm Petronas echoed that sentiment.

"It's bedlam, it's just chaos. There are really no fundamentals now driving it," Tengku Muhammad Taufik said about the climbing commodity prices.

Prices are especially volatile because of the uncertainty of how long the conflict in Ukraine will last and whether the U.S. and European countries will move to block Russian exports of oil.

Canadian oil production reached a record high in recent months and output from some American states such as Texas and New Mexico is increasing too. Still, global demand is rising for oil and natural gas as economic activity picks up from the depths of the pandemic.

There is a renewed focus around the world on energy security for the first time in decades, unlike anything seen "of this dimension since the 1970s," said Daniel Yergin, vice-chair of S&P Global.

Several oilpatch companies say they are increasing spending to increase production, but it's not a quick and easy process to ramp up supplies.

"We're working hard to make sure we're maximizing production," said Darren Woods, chief executive of ExxonMobil.

It's a challenge though, he said, because investments in the industry dropped sharply during the pandemic.