MOSCOW: Russia's stock markets on Monday tumbled after the failure of the world's top oil producers to agree a deal to cap output appeared to spell more trouble for the country's energy-reliant economy.
Oil prices plunged after Saudi Arabia, the world's largest crude exporter, refused to back an agreement on Sunday in Doha with OPEC members and other major producers, including Russia, aimed at easing a global supply glut.
Moscow's dollar-denominated RTS index was down over four percent in early trading before recovering slightly, while the MICEX exchange was down more than one percent.
Russia has seen its economy slump into a profound recession, partly on the back of the fall in oil prices, and had been pinning its hopes on securing a deal to freeze production.
The ruble fell by some three percent against the dollar and the euro after making ground in recent weeks as oil prices steadied on the back of hopes a deal could be reached between major producers.
Oil prices plummeted Monday with global benchmark Brent dropping by some four percent to $41.40 by 0600 GMT.
"The big news came over the weekend, as the Doha talks collapsed as Saudi Arabia refused to countenance supply cuts unless Iran participated," Russia's Alfa Bank said.
"The market is pricing in the reality that the Saudis simply do not want to lose market share."
Analysts said that the failure of the talks in Doha would hurt the Russian currency.
"It seems that in the near-term, disappointment could prevail in the market," analysts at Russia's VTB Capital said.
Russian Energy Minister Alexander Novak admitted Sunday that the failure of the talks had come as a surprise for Moscow but insisted it would not have "any consequences" for Russia.
"Our companies are continuing to work highly competitively on the market," he was quoted as saying by Russian news agencies.
Saudi Arabia has refused to accept a freeze in oil production -- seen by many as crucial to easing a huge surplus in world supplies -- without the participation of Iran, which boycotted the Doha talks.
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