Global crude oil prices have surged to multiyear highs on Monday as supplies are anticipated to tighten further after OPEC+ talks were called off amid the sharp recovery in global fuel demand.

Brent crude increased by $0.32 or 0.4% to reach $77.48 a barrel, reported Reuters.

This follows a gain of 1.3% on 5 July 2021, marking its highest since 29 October 2018 when it reached $77.61 per barrel.

The US West Texas Intermediate (WTI) crude futures surged by $1.53, or 2.0%, to reach $76.69 a barrel, hitting its highest since 3 October 2018 of $76.77 a barrel.

Ministers of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, abandoned talks on 2 July to reach a production policy deal for August 2021 and beyond.

The move comes as the UAE disagreed with the OPEC+ members’ proposal to extend output cuts until the end of 2022, citing its low baseline production.

The extension is conditional on OPEC+ increasing UAE’s production baseline, the level from which cuts are calculated, from current 3.168 million barrels per day (Mbpd) to 3.84Mbpd, reported Reuters.

However, the UAE agreed with the member’s proposal to increase supply by 400,000 barrels per day each month to the market from August to December 2021.

OPEC secretary-general Mohammad Barkindo said: “The date of the next meeting will be decided in due course.”

Commodities broker Fujitomi analyst Toshitaka Tazawa was reported by the news agency as saying: “Expectations of OPEC+ not adding the extra supply to the market from August lent support on Monday, but investors are not keen to move in either direction from here due to uncertainty over actual actions by the OPEC+ members from next month.”

In 2020, OPEC+ agreed to reduce output cuts as fuel demand dropped as a result of the Covid-19 pandemic.