The price of oil fell on Monday after a weekend meeting of the Organization of the Petroleum Exporting Countries (OPEC) failed to yield a deal on a worldwide supply cap.
The OPEC countries and Russia met in Qatar this weekend to finalize a deal capping worldwide oil supplies at January levels through the fall. But, Reuters reports, the deal fell apart when Saudi Arabia said Iran must sign the deal as well.
{mosads}Iranian officials have long resisted capping their production, saying they want to increase their oil exports now that sanctions on the sector have been lifted. Accordingly, OPEC’s supply plan faltered, and analysts were left pinning Saudi Arabia with the blame.
“This has severely damaged the credibility of oil producers in general and of OPEC in particular,” Commerzbank, a global banking company, wrote, according to Reuters.
The price of Brent crude oil, the global benchmark, fell as much as 7 percent on Monday before recovering, settling around $41.96 per barrel by mid-morning.
The price of American crude oil was down 3.5 percent to $38.93 per barrel.
OPEC has long tried to forge a pact on worldwide oil production, looking to combat the oversupply problems that have caused the price of crude oil to plunge.
A deal has been elusive, however, with major producers vowing not to cut their output unless every member nation agrees to do so.