In a report published today, the International Energy Agency (IEA) said that the global crisis caused by the coronavirus pandemic will be felt throughout oil’s global supply chains and ripple into other parts of the energy sector.

Oil prices crumbled as the pandemic slashed global fuel consumption, with further pressure from a supply shock due to the end of production cuts from OPEC producers and Russia.

Crude oil prices ended a volatile quarter with their biggest losses in history, and declined about 55% in March, the most on record. Prices also plunged to their lowest level since 2002 on Monday. 

About 5 million barrels of oil extracted worldwide every day are not attracting high enough premiums to offset the costs of extracting it out of the field, according to the Paris-based IEA agency.

Prices available to producers in Western Canada have dropped to single digits, and instances of negative prices have also emerged in parts of North America for other grades, IEA said in the report.

Oil producers have responded by implementing major reductions to their spending on new production, with the initial cuts in the 20%-35% range relative to what was previously planned for 2020, the report added.

Many oil majors will re-evaluate their existing portfolios, possibly leading to another wave of refinery closures.