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Oil prices have fallen below $40 a barrel after Saudi Arabia said it would freeze production only if other major producers did the same, the BBC reports.

The comments by deputy crown prince Mohammed bin Salman are seen as a challenge to Iran.

It has vowed to increase oil production following the lifting of Western sanctions.

In the Bloomberg interview, the prince also spoke about his plan for a giant public investment fund.

Worth more than $2 trillion, it would be designed to reduce Saudi Arabia’s reliance on income from oil.

Part of the plan would be a sale of shares in the state-owned oil firm Aramco, which could start as soon as next year, according to the interview.