The oil industry is in shambles.

Not only is the coronavirus wreaking havoc, but so is the lack of communication between the Saudis and Russia.  Last checked, crude was down to $21.66 – and still sinking.  Now, after breaking below 2016 support, oil could be headed to lows we haven’t seen since 2001.

All thanks to headlines from Saudi Arabia that there are still no talks with Russia regarding oil prices.  “There have been no contacts between Saudi Arabia and Russia energy ministers over any increase in the number of OPEC countries, nor any discussion of a joint agreement to balance oil markets,” the Saudi Ministry of Energy said, as quoted by Zero Hedge.

While President Trump and Vladimir Putin did agree to discuss the dire state of the oil market, that may not help.  The collapse in oil demand thanks to COVID-19 is a far bigger problem that the additional barrels of oil threatened by Russia and Saudi Arabia.

The world is running out of places to store supply

As the world continues to drill and refine, we’re running out of places to store it.  At current pace, production will slow and perhaps even stop.  According to Forbes, “Analysts at Rystad Energy, the oil consultancy based in Oslo, Norway, estimate that the world is likely to run out of storage at current production rates by April, estimating earlier this week at 76% of the world’s storage is already full. In some regions, like Western Canada, storage could be full by the end of this month, they estimate—in other words, by Monday.”

IHS Markit has said surplus will reach 1.8 billion barrels of crude, which will exceed available storage of 1.6 billion barrels. “Production is going to have to be reduced or even shut in,” said Jim Bukhard, vice president and head of oil markets at IHS Markit, “It is now a matter of where and by how much.”

Eventually, there will be plenty of opportunity

Once virus fears and the oil war are behind us, we may be left with quite a few “blood in the street” opportunities, like Exxon Mobil (XOM) and Chevron (CVX).

Since Feb. 2020, Exxon has fallen from a high of $70 to a low of $30, which is unsustainable.  The last time XOM was this low was September 2004. CVX just fell from $113 to a low of $52. It hasn’t been this cheap since 2015.

Both are severely oversold, and may soon be great blood in the street opportunities.