KENDALL TIETZ CONTRIBUTOR July 06, 20211:37 PM

Oil prices climbed to a six-year high Tuesday as the Organization of the Petroleum Exporting Countries (OPEC) and Russia continue to tamp down on global output, The Wall Street Journal reported.

An OPEC meeting was called off Monday, the WSJ reported. It was the group’s third attempt to discuss surging prices and an increase in oil consumption amid an opening global economy.

July 4th gas prices were among the highest in almost seven years at a national average of $3 a gallon, the WSJ reported. The price and demand increase is causing concern among executives and OPEC leaders that higher prices could impact the economic recovery from the pandemic and ramp up inflation. 

During the pandemic, OPEC agreed to keep crude oil in the ground to limit supply, the WSJ reported. The United Arab Emirates backed out of the meeting Monday because it didn’t want to agree to a Saudi-backed deal to boost output.

OPEC and its allies have three options, according to Hans van Cleef, senior energy economist at ABN Amro Bank, the WSJ reported. First, he thinks there is about a 50% chance that OPEC strikes a deal to raise its output in August.

Alternatively, the cartel could keep going at its current rate with existing quotas and rising prices, but van Cleef doesn’t think this is likely. Lastly, he said the group could fail to agree, which could result in oil prices plummeting to $50 per barrel.

OPEC’s inability to reach a deal and increase output could tighten supplies further, according to analysts, the WSJ reported. The White House has expressed support for a deal increasing output and consequently lowering prices.

“Administration officials have been engaged with relevant capitals to urge a compromise solution that will allow proposed production increases to move forward,” a White House spokesperson told Reuters, the WSJ reported.