Oil price falls below $28 a barrel leading Asian shares to slide

Brent crude briefly dipped below $28 a barrel, the lowest level since 2003

China's volatile Shanghai Composite dropped to intraday lows not seen since last August (Getty)

Asian shares slid further on Monday after the oil price and weaker than expected US economic data stoked fears of trouble brewing in the global economy.

Brent crude briefly dipped below $28 a barrel, the lowest level since 2003, as the market braced for Iran to resume crude exports following the lifting of long-standing sanctions over the weekend.

Iran is expected to contribute to the oil price glut when it resumes pumping oil.

“Iran is now free to sell as much oil as it wants to whomever it likes at whatever price it can get,” said Richard Nephew, program director for Economic Statecraft, Sanctions and Energy Markets at Columbia University's Center on Global Energy Policy.

Analysts at Standard Chartered have warned that oil could go as low as $10 a barrel and that prices may only stop falling when the market intervenes.

China's volatile Shanghai Composite dropped to intraday lows not seen since last August but was last up by 0.4 per cent.

Japan's Nikkei 225 closed down 1.12 per cent, rebounding slightly from earlier losses of 2.5 per cent. Stock markets in South Korea and Australia also closed down.

The People's Bank of China implemented a reserve requirement ratio on some banks involved in the offshore yuan market on Monday, in what appears to be an attempt to stop strong currency losses.

Losses in China's currency are considered more dangerous than in Chinese stocks. If China lets its currency decrease in value, Chinese exports will fall in price, making it harder for US companies to compete. US companies may compete by cutting profits, which would lower share prices and have a knock on effect on US stock markets.

With oil falling at the same time, cheaper goods from China could spark deflation as people hold off on purchases to get the best deal.