"We were unable to reach an agreement — this is one of the worst meetings we have ever had," said Ali Al-Naimi, Saudi minister of petroleum and mineral resources.

The failure to do a deal is a blow for consumer countries hoping the Organization of the Petroleum Exporting Countries would take action to stem fuel inflation.

Brent crude rose $1.42 a barrel to $118.20.

"We have noted with disappointment that OPEC members today were unable to agree on the need to make more oil available to the market," said the West's energy adviser the International Energy Agency.

Al-Naimi said OPEC's four Gulf Arab countries proposed the 12-member group increase output by 1.5 million barrels a day to 30.3 million barrels a day, including Iraq which is not bound by an OPEC quota.

But they were left isolated by a majority of seven — Libya, Algeria, Angola, Ecuador, Venezuela, Iraq and Iran — who wanted to keep production unchanged. Nigeria's position was not known.

Iran said the view of the majority was that supplies were adequate for the time being and that it had proposed delaying a decision on more oil by two or three months.

"Iran believes there is no shortage of supply," acting Oil minister Mohammad Aliabadi told Reuters. "There is no request that we cannot meet, therefore there was no need to raise output and that was the opinion of many other OPEC members."

Analysts said that while there were opposing views on whether markets required more crude, the backdrop to the disagreement revolved around political tensions in the Middle East and North Africa and differences over how to respond to consumer demands. "One factor is a diverging market view. Another is politics," said analyst Samuel Ciszuk at IHS.

OPEC's own forecasts suggest more oil is required to stop oil prices rising again. OPEC's Vienna secretariat sees demand in the second half of the year 1.7 million bpd higher than current group output — in line with Saudi Arabia's proposals.

"Ongoing supply disruptions, as well as the fragile state of global economy, call for a prompt increase in supply on a competitive basis that will allow refiners to boost throughputs and meet rising seasonal demand," a statement from the IEA said.