The plunge in the first day of trading in the Muslim week also follows heavy losses in global bourses on Friday when Gulf exchanges are closed for the weekend.
The price of oil, which contributes more than 80 percent to Gulf states’ revenues, shed more than 20 percent this year to drop below $30 a barrel. This follows a plunge of 65 percent in the past two years.
The return of Iran to the oil market will only worsen the production glut that was the main reason for the oil price dive.
Qatar and Dubai bourses led the slide, diving 6.0 percent at the opening before easing slightly.
The Dubai Financial Market was trading down 5.6 percent to below the 2,700-point mark. Blue chips properties giant Emaar and leading construction firm Arabtec dropped 4.4 percent and 5.2 percent.
The Qatar Exchange, the second largest in the Gulf after Saudi Arabia’s, fluctuated sharply within minutes after opening. Less than hour after the start, the bourse was trading down 5.0 percent below the 8,800-point level.
The Abu Dhabi Securities Exchange also slumped 4.5 percent but remained above the 3,700-point mark. All sectors were down.
The Kuwait Stock Exchange dropped 2.4 percent to just above the 5,000-point mark, levels only seen in 2004.
The small market of Oman dropped 1.5 percent and Bahrain 0.3 percent.
All Gulf stock exchanges ended 2015 in negative territory, led by Saudi Arabia, after the sharp decline in oil prices.