Oil prices suffer a historic collapse as OPEC+ countries fail to reach an agreement

US oil prices crashed as much as 27% to a four-year low of $30 a barrel as traders brace for Saudi Arabia to flood the market with crude in a bid to recapture market share, CNN writes.

Crude was recently trading down 22% to $32 a barrel. Brent crude, the global benchmark, also plunged 22% to $35 a barrel. Both oil contracts are on track for their worst day since 1991, according to Refinitiv.

The turmoil comes after the implosion of the oil alliance between OPEC and Russia on Friday.

Russia refused to go along with OPEC's efforts to rescue the coronavirus-battered oil market by cutting production. The failure of the Vienna meeting left the oil industry shell-shocked, sparking a 10% plunge in oil prices Friday. Oil prices were already stuck in a bear market because of the coronavirus outbreak that has caused demand for crude to fall sharply.

But then Saudi Arabia escalated the situation further over the weekend. The kingdom slashed its April official selling prices by $6 to $8, according to analysts, in a bid to retake market share and heap pressure on Russia.

“The signal is Saudi Arabia is looking to open the spigots and fight for market share,” said Matt Smith, director of commodity research at ClipperData. “Saudi is rolling up its sleeves for a price war.”

The biggest one-day percentage drop for US oil prices this century occurred in September 2001 when they plunged 15%, according to Refinitiv statistics that go back to 2000.

Analysts said that Russia's refusal to cut production amounted to a slap to US shale oil producers, many of which need higher oil prices to survive.