In mid afternoon trading a barrel of international benchmark Brent crude was going for $38.71, while West Texas Intermediate was trading at $36.95.
On Friday traders baulked at reports that Saudi Arabia would scrap the deal unless Iran signed up, sending the oil price south by almost five per cent.
Iran yesterday threw down the gauntlet to the Saudis, renewing a vow to bring their production up to four million barrels a day. Iran is seeking to regain market share after a trade embargo, put in place due to the country's nuclear programme, was lifted in January.
It was previously thought the deal would go ahead despite Iran's refusal to participate and traders were hoping the freeze deal would be finalised at the next meeting between Opec and Russia on 17 April in Doha.
This morning it was revealed Russian oil output has risen to the highest level in almost 30 years last month, despite president Vladimir Putin promising no Russian oil companies would increase their output in 2016.
Countries failing to keep their promises on production tore apart a deal between Opec and non-Opec oil producers in the 1980s.
It has been reported Russia produced 10.91m barrels of oil a day in March, up 0.3 per cent from the 10.88m barrels produced in February.
March's figure is the highest recorded since 1987 when Russia produced 11.5m barrels a day.
The de facto cartel leader Saudi Arabia admitted in 2014 Opec's global oil market share had fallen to the extent it was no longer able control the price with its output alone.
Expensive US shale and Russian oil have gradually eroded Saudi and Opec market share in recent years and Saudi no longer wants to subsidise higher cost rivals by cutting its production.
US production has however proven to be fare more resilient to the low oil price than previously expected, though US producers are now beginning to scale back. Rig numbers in the US have halved in the last 12 months.