The Organization of the Petroleum Exporting Countries (OPEC) stated that the world market for crude is undergoing an unprecedented jolt due to coronavirus mitigation measures that have decimated demand.
"The oil market is currently undergoing a historic shock that is abrupt, extreme and at global scale," said the group of producer nations in its latest monthly report.
The cartel now forecasts a "historical drop" of around 6.8 million barrels per day (mbd) in average daily demand for 2020.
Those forecasts are less severe than those released by the International Energy Agency, a Paris-based organisation that advises major energy-consuming nations.
It forecast the drop in demand in April to be around 29 mbd, and 9.3 mbd overall in 2020.
OPEC and its allies struck a deal to scale back output by around 10 mbd, but oil prices have not rallied as traders see it as insufficient given the magnitude of the drop in demand.
The cartel also revised down its forecasts for non-cartel supplies. It now sees these as falling by 1.5 mbd for the year as a whole.
The rapid drop in oil demand thanks to the lockdowns introduced to stem the spread of coronavirus saw crude prices tumble by two-thirds from their levels at the beginning of the year has also hit investment.
"These restrictions have led to tumbling fuel consumption, amid product inventory builds, severely damaging jet fuel markets and driving gasoline margins into negative territory," said the cartel.
OPEC said capital expenditure -- money spent by oil firms to maintain and expand production -- fell to its lowest level in 13 years. "The impact of COVID-19, ensuing global economic recession and oil demand shock, will also lead to supply disruptions," OPEC warned.