Oil prices have soared after the Organization of Petroleum Exporting Countries and its allies (OPEC+) left their tense meeting without a deal on the table.
Two major oil producers, Saudi Arabia and the United Arab Emirates (UAE), fell out over plans to increase oil production despite rising demand.
The news has left the oil market with tight supplies and pushed oil prices even higher.
Brent crude jumped 1.3% to $77.12 a barrel on Tuesday morning, the highest since 2018.
U.S. West Texas Intermediate (WTI) futures stood at $76.36, around 1.6% higher than Brent’s. At one point, WTI crude hit as high as $76.98, its highest since November 2014.
The surge comes after the world’s most powerful oil producers canceled a Monday meeting to discuss plans of lifting production curbs as demand for oil recovers following the coronavirus pandemic.
For one thing, as world economies reopen, manufacturing picks up, and travel resumes, demand for oil is outpacing supply and sending prices through the roof.
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OPEC members at a deadlock
In the United States, the average price of a gallon of regular gas stands at $3.13, up 44% from last year.
The solution, analysts say, is for OPEC+ to pump more oil to meet surging demand. Members, however, disagree on how much oil should be added.
The 23-nation coalition voted for a proposal to increase oil production by roughly 2 million barrels a day between August and the end of 2021. It also proposed to extend the remaining output cuts to the end of 2022.
The UAE, however, argued that the baseline from which its share of cuts is calculated is too low. The West Asian nation said it would only accept the proposal if it is granted the same terms for calculating its quota as the Saudis. For one thing, the UAE has invested heavily in recent years to boost oil production and was OPEC’s third-largest producer in 2020.
The de facto leader of OPEC, Saudi Arabia, and the UEA have been close allies for many years. Relations between the two, however, have been tense more recently with analysts suggesting that the UEA could leave the group altogether if OPEC doesn’t give the country what it’s asking for.
Oil prices are expected to keep pushing higher if producers don’t boost their output to meet the growing demand for oil.
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