Oil prices plunged to the lowest level since February 2016 due to the coronavirus affecting trade and industries globally as well as the failure of Opec and other non-member countries led by Russia to agree on deeper cuts.
Brent, the most widely traded commodity benchmark, was down 8.57 per cent trading at $30.95 per barrel at 2.24pm UAE time, while West Texas Intermediate was down 5.64 per cent at $29.94 per barrel.
Brent is nearing the price level of $28.94 seen in January 2016, which had pushed members of Opec to form an alliance with Russia and other non-member producers to take drastic steps to draw down global inventories and stabilise prices.
However, the former allies are currently engaged in a battle for market share with Saudi Arabia reversing its earlier strategy to reduce supply. The kingdom is poised to supply 12.3 million barrels per day in April and the UAE too is expected to bring 4m bpd to the markets.
Oil prices slumped after wide-ranging travel restrictions to and from Europe, which were put in place to curb the spread of the coronavirus, led to a slowdown in industrial and commercial activity.
European and Asian stocks tumbled at the opening session, with the FTSE 100 falling as much as 9 per cent in the steepest decline seen in a decade.
The drop came despite extraordinary measures taken by the US Federal Reserve, which cut interest rates to nearly zero and introduced a $700 billion stimulus programme.
Asian stocks also closed in the red, with Nikkei down 2.5 per cent, while Hong Kong's Hang Seng fell 4 per cent and the Shanghai Composite in China settled down by 3.3 per cent.