The news handed a boost to European stock markets and energy majors, but stoked inflationary fears in Asia, dealers said.

European benchmark London Brent North Sea oil jumped to a new three-year peak at $82.36 per barrel.

New York crude zoomed to a fresh seven-year pinnacle at $78.56.

OPEC and other major producers opted Monday against increasing output by more than previously agreed -- despite tightening supplies and rising demand.

The OPEC+ grouping decided to stick with their planned increase next month in oil production of 400,000 barrels.

              **- 'Red rag' -**

"OPEC+ gave oil bulls a red rag to bid up futures contracts as it stuck to the planned increase," said Markets.com analyst Neil Wilson.

"It's not that demand is suddenly forecast to improve -- it's more that OPEC+ is keeping such a tight grip on supply."

Runaway oil prices fuel higher inflation but boost the profits and revenues of energy giants.

In London, BP shares jumped 1.3 percent to 348.90 pence and Royal Dutch Shell's 'B' shares gained 1.1 percent to £16.88.

In Paris, France's Total rallied 1.3 percent to 42.65 euros.

"OPEC's decision not to lift production volumes gave oil prices a lift into Tuesday, helping the FTSE 100 to solid gains as index heavyweights BP and Shell gushed higher," said AJ Bell investment director Russ Mould.

"This followed a tech-led sell-off in the US overnight as investors turned away from the likes of Apple, Amazon and, perhaps most notably, Facebook which had a pretty terrible day on Monday" following a major outage.

Elsewhere on Tuesday, most Asian markets fell following a Wall Street slump as surging oil prices also put further upward pressure on inflation.

Sentiment was also dented as an ongoing standoff in Washington over raising the country's borrowing limit fuelled fears of a catastrophic US debt default.

Investors were nervously monitoring developments in the crisis surrounding troubled property giant China Evergrande, which has raised warnings about contagion in the world's number two economy and possibly beyond.