Oil prices lost as much as a third of their value on Monday in their biggest daily rout since the 1991 Gulf War as Saudi Arabia and Russia signalled they would hike output in a market already awash with crude after their three-year supply pact collapsed.
Despite sliding demand for crude due to the coronavirus, Riyadh made plans to ramp up output in April after Moscow balked at OPEC's proposal last week for a further steep production cut. Saudi Arabia also cut its official crude selling price.
Russia, one of the world's top producers alongside Saudi Arabia and the United States, also said it could lift output and that it could cope with low oil prices for six to 10 years.
Brent LCOc1 crude futures were down by more than 27% at $35.5 a barrel by 1340 GMT, after early dropping by as much as 31% to $31.02, their lowest since Feb. 12, 2016.
US West Texas Intermediate (WTI) crude CLc1 fell by more than 27%, to $32.30 a barrel, after initially falling 33% to $27.34, also the lowest since Feb. 12, 2016.
The US benchmark's biggest decline on record was in 1991 when it also fell by a third.
"The timing of this lower price environment should be limited to a few months unless this whole virus impact on global market and consumer confidence triggers the next recession," said Keith Barnett, senior vice president for strategic analysis at ARM Energy in Houston.