The price of oil has dropped sharply after a meeting of oil producers failed to agree a cap on output.
Brent crude fell 7% at one point, but then recovered slightly to stand down $1.87, or 4.3%, at $41.23 a barrel.
The meeting in Qatar was attended by most members of oil producers’ group Opec, including Saudi Arabia, but not Iran.
Saudi Arabia, the world’s biggest exporter, had been prepared to freeze output if all Opec members had agreed.
But Iran is continuing to increase output following the lifting of sanctions against it.
“As we’re not going to sign anything, and as we’re not part of the decision to freeze output, we ultimately decided it was not necessary to send a representative,” the Iranian government said.
After hours of talks in Qatar, the country’s energy minister Mohammed bin Saleh al-Sada said that the oil producers needed “more time”.
He told reporters after the meeting: “We of course respect [Iran’s] position… The freeze could be more effective definitely if major producers, be it from Opec members like Iran and others, as well as non-Opec members, are included in the freeze.”
As well as the fall in Brent, the price of US crude oil fell nearly 7% before recovering some ground to stand $1.88 lower at $38.48 a barrel.
The meeting in Qatar was not formally an Opec event, though most of the group’s members were represented.
Opec has been slow to respond to the sharp fall in oil prices, which are still less than half the peak of $115 ($81) a barrel seen in June 2014.
The price of oil had risen in recent weeks, largely due to speculation that some major exporters would limit supply.
The failure to agree a freeze is not going to help oil exporters desperate to see the price of crude oil rise. They are hurting. Even Saudi Arabia – despite having significant financial buffers – is overhauling its public finances and trying to diversify its economy away from oil.
Other major oil producers are finding life even harder. One Opec member, Angola, has even gone to the International Monetary Fund seeking to negotiate financial assistance.
There is, perhaps, some compensation for the countries at the Doha meeting in that their failure to agree to curtail supply increases is likely to renew the pressure on shale oil producers in the US, who were not and never would be represented at a gathering such as this.
The rise of the American shale industry in the last decade or so is one of the main reasons why global supplies are so plentiful and why prices are now less than half what they were in mid-2014.
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