Shares in the energy-dependent Gulf plunged to multi-year lows Sunday after OPEC's failure to agree on a coronavirus action plan prompted fears of an all-out oil price war.
OPEC and its allies failed to clinch a deal on production cuts that would have offered support to energy markets, sending prices tumbling to four-year lows on Friday.
The OPEC+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter the effects of the novel coronavirus, but Moscow refused to tighten supply.
Fears of a price war were stoked as Saudi Arabia -- the world's top exporter -- quickly responded by making significant cuts to its oil price.
All the seven bourses in the Gulf were in the red amid a panic sell-off over fears that energy prices, the mainstay of public revenues in the region, could collapse.
The Saudi stock market, the largest in the region, dived by 8.3 per cent at close on Sunday, the first day of the trading week. It was the lowest closing since November 2017.
Shares in oil giant Saudi Aramco dropped below their IPO price of 32 riyals (USD 8.5) for the first time, losing some 9.1 per cent to 30.00 riyals.
The world's biggest company launched on the bourse to much fanfare in December in a record-breaking initial public offering, but since then its market value has slipped from the IPO value of USD 1.71 trillion to USD 1.6 trillion.
The slide on the Saudi market also came amid accounts of high level arrests among the ruling family that sent shockwaves around economic circles in the region.
Multiple sources told AFP that Saudi authorities have detained three princes, including King Salman's brother and nephew, for allegedly plotting a coup, in a move that signals Crown Prince Mohammed bin Salman's tightening grip on power.
The Dubai Financial Market shed 7.9 per cent to its worst closing in six years, while its sister market in Abu Dhabi fell 5.4 per cent and Qatar Stock Exchange dropped 2.9 per cent, the lowest since mid-2018.
Dubai's Market leader Emaar Properties, the largest real estate company in the Middle East, fell 9.7 percent to a price of 2.97 dirhams (81 cents), its lowest in eight years.
Kuwait Boursa authorities stopped trading after the Premier Index slumped 10 per cent while the All-Shares index dived 8.3 per cent.
The tiny markets of Bahrain and Oman dropped by 3.4 per cent and 2.8 per cent, respectively.
Bloomberg News reported on Sunday that Saudi Arabia had begun an all-out oil war after making the biggest cut in its oil prices in the last 20 years.
The Gulf powerhouse cut its price for April delivery by USD 4-6 a barrel to Asia and USD 7 to the United States, with Aramco selling its Arabian Light at an unprecedented USD 10.25 a barrel less than Brent to Europe, Bloomberg said.
"Saudi Arabia is responding to Russia's exit from output cuts by launching a price war," Bill Farren-Price of Petroleum Policy Intelligence told AFP.
"They will boost volumes (exports) and seek market share at all costs. Oil prices will collapse on Monday" when global markets open, he predicted.
"The combination of higher oil production and lower demand due to the coronavirus makes that inevitable. It will be a bloodbath."
The new developments are reminiscent of the oil price war that erupted in 2014 and sent oil prices crashing to less than USD 30 a barrel.
The price fall then battered revenues in the Gulf countries, forcing them to resort to austerity measures and borrowing to plug budget deficits.
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