Petrol prices are expected to fall in the coming days after Saudi Arabia launched a price war against Russia.
Oil prices in the US fell up to 27 percent to a four-year low of US$30 (NZ$48) a barrel, according to CNN.
The price of Brent crude dipped 22 percent to US$35 a barrel, putting it on track to its worst day since the first Iraq war in 1991.
It follows a 10 percent drop in prices during the weekend after Russia refused to back a plan with OPEC and Saudi Arabia that would help address the collapse in global demand of oil. The COVID-19 coronavirus outbreak caused the sharp drop in demand.
China is the world's largest importer of oil, Forbes says, and with much of the country shut down due to the COVID-19 outbreak, there has been a sharp decline in crude oil consumption.
With fewer people in China travelling long distances, global prices are being driven down to try and entice people to fuel up.
Russia's refusal to support OPEC's proposal prompted Saudi Arabia to cut the price of its crude oil and increase oil production.
It slashed its April selling prices to US$8 to try and retake market share and put pressure on Russia.
"The signal is Saudi Arabia is looking to open the spigots and fight for market share," ClipperData's director of commodity research Matt Smith told CNN. "Saudi is rolling up its sleeves for a price war."
Hedge fund investor and co-founder of the Merchant Commodity Fund Doug King says the price war "is going to get nasty".
"OPEC+ is going to pump more, and the world is facing a demand shock. $30 oil is possible," he told Bloomberg.
The failure for Saudi Arabia, Russia and OPEC to come to an agreement "represents the worst-case scenario that could have happened", Velandera Energy's chief financial officer Manish Raj says.
"The breakdown was a classic game theory outcome - each side stands to gain if the other side backs down. However, if neither side backs down, then they both lose," he told MarketWatch.