Oil prices plunge, world shares trampled

Oil prices plunge, world shares trampled

Oil fell by the most since 1991 on Monday after Saudi Arabia started a price war with Russia by slashing its selling prices and pledging to unleash its pent-up supply onto a market reeling from falling demand because of the coronavirus outbreak.

Libby Hogan reports.

Oil prices crashed on Monday (March 9) after Saudi Arabia kicked off a price war with Russia.

The freefall threw financial markets into chaos.

Massive discounts from Saudi saw oil prices collapse by as low as 30 percent the biggest percentage drop since 1991 at the start of the Gulf War.

On Sunday, Saudi slashed its export prices and pledged to unleash its pent-up supply of oil onto the financial markets.

It's attempting to punish Russia after OPEC failed to agree on cuts to oil production last Friday.

It would have been an attempt to fight prices falling from shock over the coronavirus.

Now, Saudi Arabia appears to have shifted gears.

If it can't bump up the price, it's going to push it down.

The outcome to this has sent the US dollar crashing, S&P futures fell 5% before hitting a limit and Asian stock markets opened sharply down on Monday.

A sell-off saw Japan's Nikkei fall as low as 5 pecent and Australia's commodity heavy market fell 6 at the open.

Saudi's discounts will likely mean lower prices at the gas pump for U.S. drivers.

But there are worries that U.S. oil producers carrying a lot of debt - could be squeezed by the plummeting prices.