The price of Brent Crude plummeted over 30% to a low of $31 a barrel before recovering to $36 a barrel by mid-morning.
Oil prices have been under significant pressure since OPEC leader Saudi Arabia slashed its prices after failing to convince Russia to cut oil production in a meeting last Friday sparking a price war.
It is thought Saudi Arabia could increase production to nearly 11 million barrels per day (bpd) in April after OPEC did not reach an agreement.
The OPEC meeting was originally made to discuss how to respond to the falling demand for oil driven by the spreading coronavirus.
The crash in oil prices combined with the rising threat of coronavirus sent global markets tumbling on Monday morning.
The FTSE 100, which is made up of major oil companies such as BP, tanked as far as 8.5% to 5,899 points, its worst one-day drop since the Global Financial Crash, while the Euro Stoxx 50 is down 7.2%.
In Asia markets, the Nikkei 225 has dropped 5.1% overnight while the Hang Seng fell 3.4%.
Nigel Green, CEO and founder of deVere Group commented: “This is an issue that will not be resolved overnight and it can be expected to have far-reaching consequences.
“It comes as the world scrambles to deal with the market mayhem and economic fallout caused by the relentless global spread of coronavirus.
“With the combination of the implications of the oil stand-off and the outbreak, I now believe that it is almost inevitable that there will be a global recession this year.”