Following a disagreement on production cuts between OPEC and its allies, oil markets plunged 26% on Monday. Russia declined to lower output last week, and Saudi Arabia announced Saturday that it was offering discounts to its official selling prices next month. The kingdom is also reportedly planning to raise production.
"We are in another period of true turmoil," said Yergin, the vice chairman of IHS Markit.
Referring to what happened in 2008 and 2009, he said that was more focused on the financial markets. "This is now turning into an economic crisis along with a health crisis," he told CNBC's "Capital Connection" on Monday, referring to the ongoing coronavirus outbreak.
"I think we're going to see a lot more freezing up of economic activity in the United States, not because of economics but because of the virus," he said. "The fear is now pervasive."
The "backdrop" to all this is the coronavirus, Yergin said. "That's what really splintered the (OPEC+) alliance," he said.
Infections have been reported in more than 100 countries since the outbreak began in the Chinese city of Wuhan late last year.
Riyadh pushed for a supply cut of 1.5 million barrels a day at the OPEC+ meeting last week, but Moscow did not approve. That then sparked a price war in the market.
"This also comes at a time when it's not just about oil but it's about the global economy and this freezing up we're seeing," Yergin said.
"I think the distress on the demand side is going to be there," he said. "Even if people fight for market share, they're fighting in a very constrained space."
IHS Markit sees oil demand lower by nearly 4 million barrels a day in the first quarter of 2020 because of the virus.
"If this kind of panic continues — this financial contagion combined with the virus contagion — we could certainly see the oil prices lower."
— CNBC's Pippa Stevens, Eustance Huang and Sam Meredith contributed to this report.