Oil prices dropped nearly 25% on Monday, on its way to its steepest loss since 1991 as Saudi Arabia cut prices and planned for a big hike in crude output by April.
Prices were down 31% after Saudi started a price war with Russia, which stopped from implementing further supply cuts agreed by OPEC in order to steady oil markets.
Brent crude futures dropped 25%, or $11.31, at $33.96 per barrel. Brent futures are on its way to its biggest fall since January 1991, at the beginning of the first Gulf War.
U.S. West Texas Intermediate crude was down 26%, or $10.73, at $30.55 per barrel, also heading to its biggest daily decline since January 1991.
Saudi Arabia is set to increase its crude production by more than 10 million bpd in April after OPEC+’s current deal to cut production ends at the end of March.
Saudi Arabia is planning to penalize Russia for not following the agreed production cuts by the OPEC.
Major producers like Saudi Arabia and Russia last fought over market share on 2014-2016 when they were trying to force out production in the United States, which then became the world’s largest oil producer due to doubling production from shale oil fields in the last decade.
Saudi Arabia started the war by slashing its official retail prices for all crude grades to all export markets on April between $6 to $8 per barrel.