Oil prices are crashing today. At one point, crude oil prices were down more than 30%. While prices have bounced off those lows, they were down more than 20% at 8:00 a.m. EDT on Monday. 

Crude prices tumbled last week following the collapse of a deal between Russia and members of OPEC to reduce their production by an additional 1.5 million barrels per day. Russia, however, resisted the further cuts.

A bright red arrow going down.

Image source: Getty Images.

That's leading Saudi Arabia -- one of the top global oil producers -- to retaliate. The country slashed its official oil prices and planned to ramp up its production. It could pump as much as 12.5 million barrels per day (BPD), up from its current level of 9.7 million BPD.

The Saudi-fueled oil market sell-off is causing shockwaves across the oil patch. Shares of oil companies are cratering, with oil giant Exxon (NYSE:XOM), for example, shedding 10% of its value in pre-market trading, while large producers ConocoPhillips (NYSE:COP) and Occidental Petroleum (NYSE:OXY) tumbled more than 20%.

The oil price plunge will likely have a significant impact on the U.S. oil industry. Most producers will need to slash their drilling budgets and payrolls to stay afloat. Diamondback Energy (NASDAQ:FANG) was the first one out of the gates, announcing today that it would immediately slash its activity level. That spending cut will allow Diamondback to "protect our balance sheet and dividend." Others, however, likely won't be able to cut their way out of the market's downdraft due to their already weak financial condition, which could cause a wave of energy company bankruptcies in the coming months.