LONDON, March 18: Oil prices plunged on Tuesday as expectations grew among traders that a looming war in Iraq would be won swiftly and without significant supply shortfalls on world markets.

The price of reference Brent North Sea crude oil for May delivery plunged by about three dollars per barrel or over 10 per cent in early deals here to a trough of 26.40 dollars.

Prices later stabilized somewhat, standing at 27.75 dollars per barrel in late deals, down 1.73 dollars from the previous closing price.

The drop was just as dramatic in New York, where benchmark light sweet crude contract for delivery in April fell about three dollars to near the 32-dollar mark in early trading.

“The market is collapsing because people feel it’s going to be a very quick war,” said GNI trader Robert Laughlin.

The price slump continued after US President George W. Bush used an address late Monday to give Iraqi leader Saddam Hussein 48 hours to leave the country or face attack.

Increased supplies from other producers in the Gulf and elsewhere, and the prospect of the release of strategic crude reserves held by oil-importing nations were also assuaging war worries, traders said.—AFP