Crude prices surged on Tuesday as international lenders reached the much-awaited Greek bailout deal, with New York benchmark hitting the highest level since May.

Euro zone finance ministers agreed on a 130-billion-euro bailout for Greece on Tuesday to help the debt-burdened country avoid chaotic default next month.

Although the bailout would not solve Greek debt problems fundamentally as it would do little in boosting Greece's weak economy, it was still a great relief for the markets.

The euro rose to two-week high against the dollar and the dollar index dipped about 0.4 percent, pushing up crude prices.

Besides, Iran has halted oil exports to Britain and France in a move to cut oil supplies to Europe. Iranian National Oil Corp. has also announced that it would stop selling oil to European refineries if they refused to sign long-term contracts. Worries about a supplies disruption supported price increase.

Meanwhile, China's central bank reduced banks' reserve requirement ratio, sending out monetary easing signs.

Light, sweet crude for March delivery soared 2.60 dollars, or 2. 52 percent to settle at 105.84 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude rose 1.61 dollars, or 1.34 percent to close at 121.66 dollars a barrel, the highest settlement since June.