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Adapted from IEA; Chart: Andrew Witherspoon/Axios

The IEA didn't mince words with the headline on Wednesday's explainer about the upended market: "The global oil industry is experiencing a shock like no other in its history."

Where it stands: It says the biggest force is the utter collapse in demand as the coronavirus outbreak freezes much transportation and economic activity, plus the supply shock from the end of the OPEC-Russia restraints.

  • The massive lockdowns mean one of the "traditional stabilizers" — more consumer activity from low prices — is missing.
  • "Instead, a rapid build-up of oil stocks is starting to saturate available storage capacity, pushing down prices further."

What they found: There are daunting economics and hard choices facing producers.

  • "At the moment, about 5 million barrels of oil produced worldwide each day is not fetching high enough prices to cover the costs of getting it out of the ground. ... These operations are now losing money on every barrel they produce."
  • (That 5 million figure is based on Brent crude at $25 per barrel; this morning it's at around $27.34.)

The intrigue: Differences in extraction costs mean that lower price hit the economics of North American production harder than fields in the Middle East and Russia.

But, but, but: While a substantial amount of global output will likely stop (IHS Markit sees 10 million bpd cut or shut-in from April to June), the IEA cautions: "The economics of getting oil out of the ground are not necessarily a good guide to which operations will actually halt production."

  • They note that some producers will consider how long they estimate the crisis will last and balance that against the costs of shutdowns and possible restarts.
  • "Moreover, some producers may opt to wait and see if weaker rivals go out of business, which would improve the environment for those who stay in the game."

Go deeper: Trump slated to meet with oil CEOs

Go deeper

31 mins ago - World

U.S. strikes Iran-backed militia structures in Syria

President Biden at the Pentagon on Feb. 10. Photo: Alex Brandon - Pool/Getty Images

The United States on Thursday carried out an airstrike against facilities in Syria linked to an Iran-backed militia group, the Pentagon announced.

The state of play: The strike, approved by President Biden, comes "in response to recent attacks against American and Coalition personnel in Iraq, and to ongoing threats to those personnel," Pentagon press secretary John Kirby said in a statement.

Senate parliamentarian rules $15 minimum wage cannot be included in relief package

Photo: Al Drago/Getty Images

The Senate parliamentarian ruled Thursday that the provision to increase the minimum wage to $15/hour cannot be included in the broader $1.9 trillion COVID relief package.

Why it matters: It's now very likely that any increase in the minimum wage will need bipartisan support, as the provision cannot be passed with the simple Senate majority that Democrats are aiming to use for President Biden's rescue bill.

Dave Lawler, author of World
51 mins ago - World

Biden's big Saudi reset

Mohammed bin Salman. Photo: Ryad Kramdi/AFP via Getty

President Biden spoke with Saudi Arabia's King Salman this evening ahead of the release of a CIA report expected to implicate the king's son, and the kingdom's de facto ruler, in the murder of a U.S.-based journalist, Jamal Khashoggi.

Why it matters: In one month, Biden has ended support for the Saudi war effort in Yemen, frozen a large arms deal and snubbed Crown Prince Mohammed bin Salman (MBS) by declining to speak with him directly.