Hopes that the long-anticipated talks in Doha on Sunday would see the world’s biggest producers agree to a freeze had helped the black gold climb to 2016 highs last week, having approached 13-year lows just months ago.
However, Saudi Arabia’s decision to walk away owing to Iran’s refusal to take part sent shockwaves through trading floors, fuelling worries of another rout in the commodity and world markets.
After six hours of negotiations, the 18 producers concluded that they needed “more time” to reach an agreement, Qatari Energy Minister Mohammed bin Saleh al-Sada said.
US benchmark West Texas Intermediate for May delivery was down 4.56 percent, or $1.84, at $38.52.
And global benchmark Brent crude for June lost 4.06 percent, or $1.75, to $41.35.
Energy firms were the biggest losers Monday, with Sydney-listed mining giant BHP Billiton down almost three percent, Rio Tinto off more than one percent and Woodside Petroleum 1.5 percent off.
In Hong Kong China’s CNOOC lost more than three percent and PetroChina was off 2.3 percent. Inpex in Tokyo was 4.5 percent off and JX Holdings 2.5 percent down.
While key producer Iran had said it was unwilling to freeze output — having just renewed exports after years of Western nuclear-linked sanctions — there had been hope that all other majors at the talks would hammer out a deal.