The Saudi index was down 6.5 percent in the first 15 minutes of trade after Brent oil slumped more than 6 percent to settle below $29 a barrel on Friday, capping a 13 percent decline for the week.
Riyadh has been putting in place austerity policies designed to stabilise government finances in an era of cheap oil, but analysts believe its budget calculations were based on an average oil price of about $40.
If oil stays at current levels, authorities could be pressured into more spending cuts to reduce the red ink, slowing economic growth further - and conceivably threatening a recession.
That prospect caused 167 Saudi stocks to drop in early trade while no stock rose. Petrochemical producer Saudi Basic Industries sank 7.4 percent while miner Ma'aden lost 7.1 percent.
Egypt's index slid 5.2 percent in a broad-based sell-off as investment bank EFG Hermes tumbled 6.2 percent. Blue chip lender Commercial International Bank plunged 7.7 percent.
Foreign investors have been heavy sellers of Egyptian stocks during the emerging market rout of the last few days, causing panic among local investors in Cairo.