Saudi Arabia and Russia, two of the world's biggest oil producers, have rejected the US demand to increase pumping, causing a further spike in the global crude prices. At $81.48 a barrel, Brent crude was trading at its highest level since November 2014, on Tuesday.
US President Donald Trump had bluntly demanded an output increase last week, saying the US owes it from the producers' cartel led by Gulf Arab countries in lieu of the military protection Washington offers.
"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!" Trump had said.
However, in its meeting held in Algiers over the weekend, the Organization of the Petroleum Exporting Countries (Opec) snubbed Trump and decided not to raise output.
"There is no agreement to raise production, and oil prices at 80 U.S. dollars per barrel would be better off for both producers and consumers," Saudi Arabia's Energy Minister Khalid al-Falih said after the meeting.
While Opec President Suhail Mohamed Al Mazroui said the cartel won't succumb to political pressures, Russia joined in saying that the oil price rise was a result of the US actions.
"The sanctions and the trade wars imposed by some powers will have an impact on the global economy and therefore on the oil market," Russian Energy Minister Alexander Novak said.
Meanwhile, the Wall Street Journal, citing traders, has said that a combination of thinner supply from Iran and supply limitations in Saudi Arabia could drive prices to $100 a barrel.
Re-run of the price boom of 2008
On Monday, analysts at commodity merchants Trafigura and Mercuria said global crude prices would rise at a faster price in the rest of the year and could touch $100 by December. As much as two million barrels of oil could be taken off the market as tougher US sanctions against Iran come into force, and this will drive prices up, they warned.
Oil prices have been steadily rising since 2017 and market participants are not averse to discussing a potential re-run of the price boom of 2008.
Citing a combination of factors, Bank of America Merrill Lynch has said that a "likelihood of an oil spike and crash scenario akin to the one observed in 2008 has increased".
The bank has noted that the Iranian outage was more severe than expected and soppy scenario from Venezuela was worsening. Meanwhile the chances of non-Opec producers filling the gap were limited as US shale production was facing bottlenecks.
With global oil demand nearing 100 million barrels per day, a historical high, the supply-side constraints can have a longer-term impact on oil prices.
Experts say only an ensuing 'demand-destruction' could set prices back. But then such a demand destruction (theoretically triggered by the emerging market oil consumers) won't come into play before Brent crude hits $120 a barrel.