The price of actual barrels of multiple crude streams in Europe, Asia and Africa has plunged to as little as US$5 a barrel after a key pricing benchmark fell to a 21-year low, dragging down the entire physical oil market.

The Dated Brent benchmark, a global reference for nearly two-thirds of the world’s physical flows, plunged to US$13.24 a barrel on Tuesday, the lowest since 1999, according to price reporting agency S&P Global Platts.

As Dated Brent is used for determining the price of many other physical grades, that means that key European and African crude streams will now sell under US$10 or even US$5 a barrel, since many are at hefty discounts to the benchmark, traders said. Grades in Asia are at rock bottom too. Stockpiles the world over are expanding rapidly because of the demand hit caused by COVID-19, and space to store the glut is running out.

“What we see right now is obviously a meltdown in the market,” says Johannes Benigni, founder of consultant JBC Energy GmbH. “The market is running into tank tops. Right now it’s bad.”

Among the grades hardest hit are those most exposed to buying in what’s known as the spot market -- for immediate supply. That’s particularly the case in West Africa, where one of Nigeria’s main streams, Bonny Light crude is pricing would be pricing a little over US$8 a barrel if Dated Brent stays where it is.

Millions of barrels of crude from the nation remain unsold and planned future loadings are almost a week late, traders said. Nigeria will have to cut production with or without an OPEC agreement because it has nowhere to store its crude, the CEO of state oil company NNPC told a local publication.

Globally, producers have taken at least 1.9 million barrels a day of supply offline this month, meaning less revenue at lower prices, according to consultant Rystad Energy.

In the Mediterranean, the jet-fuel-rich CPC Blend that comes mostly from Kazakhstan is effectively about US$9 below Dated Brent. That implies a real-world price of about US$4 a barrel if the market stays as it is. Azerbaijan’s state oil company Socar said its Azeri Light crude price fell to a record low on Wednesday. The key North Sea Forties grade is a little under US$10.

In Asia, Timor’s Bayu Undan condensate is trading for less than US$5 a barrel, while supplies from Sakhalin in Russia are heavily discounted too. Qatari medium-sour Al-Shaheen crude for June loading was price at less than US$15.

The plunge in the physical market outside North America comes two days after U.S. crude turned negative. Bakken crude from North Dakota fell as low as minus US$37.63 this week, while smaller grades were posted below minus US$50.

The slide is a sign of how far refinery demand has fallen. Plants from Portugal to Italy and the U.S. have shut down since the crisis began as their storage tanks are full. Consumption of some oil products in France as fallen by as much as 95 per cent since the coronavirus pandemic began. Total SA said recently that it might not be able to keep its refineries open for another month.

“This is going to be horrible for many, the market just isn’t set up to cope for such swings in demand,” said Christopher Haines, an oil analyst at consultant Energy Aspects Ltd.