Hopes the Opec exporters' club and other major producers including Russia would agree to freeze output at Sunday's talks in Doha helped scrape oil prices off the 13-year lows they touched in February. But the commodity tanked this morning after kingpin Saudi Arabia walked away from the talks, which many hoped would ease a huge surplus in world supplies, because of a boycott by its rival Iran. US benchmark West Texas Intermediate for May delivery was down 4.9pc at $38.37. Brent crude, the global benchmark, lost 4.6pc to $41.13. Energy firms were the biggest losers, with Sydney-listed mining giant BHP Billiton down 3pc, Rio Tinto off 1.6pc and Woodside Petroleum down 1.4pc. "Expectations for the talks to end with an agreement were high, and the lack of one damaged the credibility of future meetings to support the oil market," said Bernard Aw, market strategist at IG Markets Singapore. Sanjeev Gupta, an oil and gas analyst at EY, told AFP that failure in Doha "revived price collapse fears especially after Saudi Arabia hardened its stance and threatened to raise production quickly if no freeze deals were reached". Peter Lee, an oil and gas analyst BMI Research, warned oil price losses could reach 15pc. "What is clear coming out of this is that Opec would no longer be the main driver of oil prices," Mr Lee told AFP. Angus Nicholson, also of IG Markets, said geopolitics was behind the failure of the talks. "With Saudi Arabia fighting proxy wars with Iran in Yemen and Syria/Iraq, it is understandable that they had little inclination to freeze their own production and make way for newly sanctions-free Iran to increase their market share," he said. Major exporters from Nigeria to Venezuela, and even Saudi Arabia, have suffered billions of dollars in lost revenue as prices have slumped from levels above $100 touched in mid-2014.
But Iran, which only recently returned to world oil markets after the lifting of nuclear-linked Western sanctions in January, has ruled out capping its own production as it seeks to regain market share.
"The market share battle is expected to rage on as the failure of the oil-freeze pact could set off another price drop," Mr Gupta said. Opinion had been split over whether a deal on Sunday would be enough to tackle the global oversupply, which is also due to slowing demand in major consumer China and burgeoning US shale production.
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