Oil prices have dropped sharply after a meeting of oil producers in Qatar 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 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.

However, Iran is continuing to increase output following the lifting of sanctions against it.

Photo Reuters

“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, energy minister Mohammed bin Saleh al-Sada said that the oil producers needed “more time”.

Mohammed bin Saleh al-Sada 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 a barrel seen in June 2014.

Oil prices had risen in recent weeks, largely due to speculation that some major exporters would limit supply.