Markets from around the world are experiencing immense downturns as the possibility of a price war between oil exporting group, OPEC, and Russia increases.
The FTSE 100 index reached its lowest level in three years as shares fell drastically by 8% in early trading, dragging the index below 6,000 points.
The FTSE 100 collapse came after the index lost £59bn on Friday following a £200bn loss the previous week.
London’s descent follows many other major global markets. Japan’s Nikkei 225 index fell by 5%, while Australia’s ASX 200 dropped 7.3%, its biggest daily drop since 2008.
These declines have further escalated fears regarding the impact of coronavirus on the economy.
The catalyst for today’s depletion was Saudi Arabia’s decision to increase oil production, launching a price war with Russia after the two sides failed to agree on a cut to supply to stabilise the oil market.
Currently, oil prices are down by more than 20% with Brent crude trading at $35.98 a barrel. Oil companies Shell and BP both fell by 15%.
Investors are rapidly selling their stocks as they are uncertain of what Saudi Arabia and Russia might do in the near future.
Justin Urquhart-Stewart, co-founder of Seven Investment Management, said: “It shows a level of nervousness in the market which I haven’t seen in a long time.”