Oil prices could break below USD 20 this year as tensions simmer between Iran and Saudi Arabia, two of the world's largest oil players, Again Capital founding partner John Kilduff said Monday.

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"I think you're going to get as low as USD 18 and maybe get as high as USD 48 ... It's going to get really ugly," he told CNBC's "Squawk Box. "The Iranians doubled down again, if that's even possible, by saying that they could put 500,000 more barrels on the market within weeks after the sanctions get lifted."

Kilduff was referring to the anticipated lifting of sanctions related to Iran's nuclear program, which have locked the country out of international oil markets.

Saudi Arabia on Sunday cut diplomatic ties with Iran after the former's supreme leader Ayatollah Ali Khamenei said the Saudis would face "divine revenge" for its execution of prominent Shiite cleric Sheikh Nimr al-Nimr, one of 47 put to death over the weekend. Protesters stormed the Saudi embassy in Tehran following the announcement of Nimr's death.

Saudi Arabia is the dominant Sunni Muslim power in the Middle East, while Iran is led by Shiites.

The Organization of the Oil Exporting Countries (OPEC), led by Saudi Arabia, has declined to impose production caps to prop up crude prices, accelerating a rout that has cut the cost of oil by two-thirds from its highs in 2014.

"OPEC maybe as we know it is over because these two are not going to be coming together any time soon on modifying or moderating production," Kilduff said.

First Published:Jan 4, 2016 5:52 PM IST