Oil prices lost as much as a third of their value today in their biggest daily rout since the 1991 Gulf War.
The falls came 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 next month 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 US, also said it could lift output, adding that could cope with low oil prices for six to 10 years.
Brent crude futures were down by more than 27% at $35.5 a barrel this afternoon, after earlier dropping by as much as 31% to $31.02, their lowest since February 12, 2016.
US West Texas Intermediate (WTI) crude fell by more than 28%, to $32.00 a barrel, after initially falling 33% to $27.34, also the lowest since February 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 strategic analysis at ARM Energy in Houston.
The disintegration of the grouping called OPEC+, made up of members of the Organization of the Petroleum Exporting Countries plus Russia and other producers, ends more than three years of cooperation to support the market.
Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April after the current deal to curb production expires at the end of March, two sources told Reuters on Sunday.
The kingdom has been producing around 9.7 million bpd in recent months.
Saudi Arabia, Russia and other major producers last battled for market share in 2014 in a bid to put a squeeze on production from the US, which has not joined any output limiting pacts and is now the world's biggest producer of crude.
"The deal was always destined to fail," said Matt Stanley, senior broker at Starfuels in Dubai, adding that the main result of the OPEC+ pact "has been that US shale producers have gained market share."
Saudi Arabia over the weekend cut its official selling prices for April for all crude grades to all destinations by between $6 and $8 a barrel.
"The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the signiﬁcant collapse in oil demand due to the coronavirus," Goldman Sachs said.
China's efforts to curtail the coronavirus outbreak has disrupted the world's second-largest economy and curtailed shipments to the biggest oil importer.
The virus has also spread to other major economies such as Italy and South Korea.
The International Energy Agency said today oil demand was set to contract in 2020 for the first time since 2009. It cut its annual forecast by almost 1 million bpd and that the market would now contract by 90,000 bpd.
Major banks have cut their demand growth forecasts. Morgan Stanley predicted China would have zero demand growth in 2020, while Goldman Sachs sees a contraction of 150,000 bpd in global demand.
Goldman Sachs also cut its forecast for Brent to $30 for the second and third quarters of 2020.
In other markets, the dollar was down sharply against the yen, Asian stock markets sharply lower, and gold rose to its highest since 2013 as investors fled to safe havens.