Oil refinery (3)

Oil prices, and the share price of oil firms, have tumbled after negotiations over a production freeze failed over the weekend.

Brent crude oil fell as much as 7%, before recovering to a 5.3% drop at $41.23 per barrel. Meanwhile shares in BP and Royal Dutch Shell fell by 2.4% and 3%, respectively.

The world's major oil producers met in Doha, Qatar over the weekend, hoping to agree a cap on oil production in an attempt to boost prices. Oversupply has widely been attributed as the key factor behind the demise of oil prices, which fell from $115 per barrel in the summer of 2014 to as low as $28 per barrel at the start of 2016.

In February, Saudi Arabia, Venezuela, Qatar and Russia - some of the world's biggest oil exporters - agreed to freeze production at current levels, if other oil-producing nations agreed to do to the same.

But the weekend's meeting failed to end in agreement, with Iran failing to turn up and continuing to increase production. It was only recently that significant economic sanctions imposed on Iran were lifted, meaning it was once again able to export oil. Iran's envoy to Opec (Organization of Petroleum Exporting Countries), Mehdi Asali, even described the output freeze as "illogical".

The Iranian government said: "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 Qatari energy minister, Mohammed bin Saleh al-Sada, told reporters following 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."

Opec, led by Saudi Arabia had been reluctant to reduce production, with many critics arguing that it was using weak oil prices for political leverage in the Middle East, but February's principle agreement with other Opec nations and Russia sparked hopes of a rebound for oil prices.

Having "bottomed out" below $30 in the opening few weeks of 2016, oil prices have grown steadily in recent weeks to over $30 per barrel. Much of those rises were down to some expectation that oil producers would agree a freeze in Doha over the weekend.