An all-out oil price war has created an "unprecedented" situation in energy markets, analysts told CNBC Monday, with traders impatiently waiting to see which of the world's largest oil producers will blink first.

It comes after OPEC and non-OPEC allies, sometimes referred to as OPEC+, failed to agree on the terms of deeper supply cuts late last week.

The fallout between OPEC kingpin Saudi Arabia and non-OPEC leader Russia has kickstarted an oil price war, with crude futures on track to register their biggest daily rout since the first Gulf War in 1991. Oil prices were already reeling from the coronavirus outbreak, with many increasingly concerned about the outlook for oil demand growth.

International benchmark Brent crude traded off lows at $37.24 Monday afternoon, still down more than 17%, while U.S. West Texas Intermediate (WTI) stood at $34.55, around 16% lower. Brent futures were down more than 30% at one stage in the session, before paring some of their losses.

"We are experiencing, within a short period of time, a demand shock with corona and a supply shock now with OPEC," Johannes Benigni, chairman and founder of JBC Energy Group, told CNBC's "Squawk Box Europe" on Monday.

"I mean, figuring that out is absolutely amazing, we are making history here. You can call it now a world war of oil. It is not that actually Saudi Arabia is taking on Russia which everyone is talking about. They may do that, but Russia always said they want to take on a little bit more of the shale industry."

"By Saudi Arabia actually now declaring war, they are front-running the Russians in declaring war on U.S. shale," Benigni said.