The world price of oil has slumped as low as $10 a barrel after Russia impedes further steep output cuts proposed by OPEC to stabilize oil markets.
Oil prices plunged about 25 % after Saudi Arabia slashed prices and set plans for a big increase in crude production, leading to fears of a price war.
International benchmark Brent crude price also plummeted 27.26% to $32.93 per barrel.
It has been the biggest daily decrease since January 17, 1991 when the first Gulf War started.
The cataclysmic collapse will resonate through the energy industry, from giants like Exxon Mobil Corp. to smaller shale drillers in West Texas. It will hit the budgets of oil-dependent nations from Iraq to Nigeria and could also reshape global politics, eroding the influence of countries like Saudi Arabia. The fight against climate change may suffer a setback as fossil fuels become more competitive versus renewable energy.
Brent futures suffered the second-largest decline on record in the opening seconds of trading in Asia, behind only the plunge during the Gulf War in 1991. As the global oil benchmark plummeted to as low as $31.02 a barrel, Goldman Sachs Group Inc. warned prices could drop to near $20 a barrel.
“It’s unbelievable, the market was overwhelmed by a wave of selling at the open,” said Andy Lipow, president of Houston-based energy consultancy Lipow Oil Associates LLC. “Opec+ has clearly surprised the market by engaging in a price war to gain market share.”