Oil prices have fallen by around 2% after Iran rejected plans to freeze oil production, hitting an agreement between Russia and Saudi Arabia to curb low global prices.

Brent crude futures were down 70 cents and traded at $39.69 a barrel, while the US crude fell 79 cents at $37.71 a barrel, Reuters reported.

"Oil prices now seem to have bottomed, even though they are likely to stay subdued for the rest of this year before starting to move higher in 2017."

Iran said it would join the output freeze group after reaching production of four million barrels a day (bpd).

According to news agency reports, Iran Oil Minister Bijan Namdar Zanganeh will meet his Russian counterpart Alexander Novak in Tehran.

Zanganeh previously said that Iran wanted to regain its lost market share following the lifting of international sanctions.

The current oil production of Iran is between 2.8 million and 3.5 million bpd, Organization of the Petroleum Exporting Countries (OPEC) said.

OPEC members Venezuela and Qatar also agreed to the output freezing proposal, which is aimed at increasing oil prices globally.

The news agency quoted Morgan Stanley saying: "Oil prices now seem to have bottomed, even though they are likely to stay subdued for the rest of this year before starting to move higher in 2017."