March 9 (UPI) -- Crude oil prices fell nearly 30 percent early Monday after oil export leader Saudi Arabia said it would increase production in April.
The move is a response to Russia refusing to join Saudi Arabia and other OPEC members last week in an effort to cut oil production. The result will increase supplies on the oil market worldwide while demand is suppressed because of concerns over the coronavirus.
As a result of the announcement, Brent crude tumbled to $33.09 per barrel, its sharpest one-day drop since the 1991 Gulf War. U.S. crude fell 27 percent to $30 per barrel. West Texas Intermediate crude fell 23 percent to $31.73.
At its meeting in Vienna last week, OPEC tried to persuade Russia to cut production by 1.5 million barrels per day. Moscow, along with Kazakhstan, though, wanted to extend current production levels through the second quarter.
The International Energy Agency said it predicts world oil demand will shrink because of the impact of the coronavirus.
"The coronavirus crisis is affecting a wide range of energy markets -- including coal, gas and renewables -- but its impact on oil markets is particularly severe because it is stopping people and goods from moving around, dealing a heavy blow to demand for transport fuels," IEA Executive Director Fatih Birol said.