Dohar talks collapse
Oil price falls on Iran’s refusal to cut production
Oil prices fell after talks collapsed between leading producers trying to reach a deal on output.
The price plunged back below $40 a barrel largely caused by a rift between Saudi Arabia and Iran.
The lifting of sanctions on Iran means it is ramping up production and said will not stop until output its back at levels when the international embargo was imposed. As a result, output has grown by 700,000 barrels a day, contributing to the world glut.
Saudi Arabia says it will only cut production if Iran also reduces its production, but there is little sign of that happening.
Iran was asked to stay away from talks in Dohar on Sunday unless it was prepared to consider a cut in production.
The meeting had been expected to rubber stamp a deal to stabilise output at January levels until October 2016 in an attempt to slow ballooning oversupply.
Instead, the stand-off led to a 6.8% fall in US crude futures and it was trading in Asia at $38.38, contributing to a fall in stock markets. Brent futures were down 6% to just above $41.
Tokyo’s Nikkei was down 3% and the Hang Send in Hong Kong fell 1.3%.