The price of oil has dropped sharply after a meeting of oil producers 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 in Qatar 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.

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

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

He 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.