Oil fell after output talks Sunday in Doha between the world’s biggest producers ended without an agreement to limit supplies, a diplomatic failure that sent prices lower.

Futures fell 4.6% in New York, paring an earlier loss of 6.8% — the biggest decline in two months. The summit in the Qatari capital, which dragged on for more than 10 hours beyond its scheduled conclusion, finished with no final accord. There were significant hurdles to any deal after Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman said the kingdom wouldn’t restrain its production without commitments from other major producers including Iran, which has ruled out freezing for now. A strike that reduced Kuwait’s output by 60% entered a second day.

“Doha highlights the poor state of affairs between Iran and Saudi Arabia,”  said John Kilduff, partner at Again Capital LLC, a New York hedge fund focused on energy. “It shows the big split between Saudi Arabia and its Gulf allies on one side against Iran and Iraq. It was a bad day for the likes of Venezuela and Ecuador.”

West Texas Intermediate for May delivery fell $1.84 to $38.52 a barrel at 9:32 a.m. on the New York Mercantile Exchange. The contract touched $37.61, the lowest since April 8. Total trading volume was 92% above the 100-day average.

Brent for June settlement retreated $1.45, or 3.4%, to $41.65 a barrel on the London-based ICE Futures Europe exchange. The global benchmark was at a $1.34 premium to June WTI.

Oil ministers from 16 nations, representing about half the world’s output, gathered in a bid to stabilize the global market, the first significant attempt at coordinating oil output between the Organization of Petroleum Exporting Countries and nations outside the group in 15 years. Discussions stumbled after Saudi Arabia and other Gulf nations wouldn’t agree to any deal unless all OPEC members joined including Iran, which wasn’t present at the meeting, Russian Energy Minister Alexander Novak told reporters.

Tense Negotiations

“The weekend talks are a demonstration that the Saudi government, as the deputy crown prince has clearly stated, doesn’t want to cede market share,” Ed Morse, head of global commodity research at Citigroup Inc., said by phone. “They are fearful that the world may be in a weak or bearish market for a long period of time. In a bear market, as they learned from the 1980s, if they cede market share it is very difficult to get it back.”

Forty traders and analysts surveyed by Bloomberg last week were evenly split on whether a consensus would be reached, and tensions were visible throughout the negotiations. While analysts doubted that any accord would have a significant impact on the global oil surplus, the group’s inability to agree undermines any prospect of coordinated action to solve the market slump. Russia was surprised there wasn’t an agreement, said Novak. Officials from Saudi Arabia, Qatar, Venezuela and Russia — who initiated the push for a freeze in February — agreed to a draft accord on Saturday, but some countries changed their position right before the summit the following day, leading to “hot discussions,” he said.

“The fact that Saudi Arabia seems to have blocked the deal is an indicator of how much its oil policy is being driven by the ongoing geopolitical conflict with Iran,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former White House official.

Iran, which is reviving oil exports after international sanctions were lifted in January, ruled out any limits on its output before reaching pre-sanctions levels, dismissing the notion of joining the freeze as “ridiculous.” The nation’s Oil Minister Bijan Namdar Zanganeh said Saturday he wouldn’t attend the Doha talks and won’t be a signatory to any deal as it would amount to self-imposed sanctions.

OPEC members will consult among themselves and with other oil producers until June, Qatar’s Energy Minister Mohammed Al Sada said at a news conference after the meeting. The next scheduled bi-annual OPEC meeting is on June 2.

Kuwait’s crude production tumbled by 60% and its refineries scaled back operations as the state oil company took emergency measures Sunday to cope with an open-ended labor strike. Kuwait Petroleum Corp. was working Monday to resume operations at two crude-gathering facilities, state-run Kuwait News Agency reported, citing oil-industry spokesman Sheikh Talal Al-Khaled Al-Sabah.

“The only thing saving the bacon in the market is the strike in Kuwait, which is taking a considerable amount of oil off the market,” Kilduff said. “Once the labor issues are resolved there’s going to be considerable selling pressure.”

— Check out Wells Fargo Misjudged Risks of Energy Financing on ThinkAdvisor.

Copyright 2018 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.