Some cargoes of heavy Mexican crude are trading for less than $13 a barrel, and downside price momentum for hard-to-refine grades looks set to intensify.
This could act as an additional weight on benchmarks Brent and West Texas Intermediate (WTI) futures, which have slumped roughly 20 percent since the start of the year to prices under $29 a barrel.
"The drastic fall in outright prices is wreaking havoc on heavy crudes which are typically sold at deep discounts to benchmark crudes," said analysts at JBC Energy.
In the Canadian town of Hardisty, Alberta, buyers can pick up a barrel of crude known as Western Canadian Select - one of North America's largest heavy crude oil streams - for less than $15, while producers need a price above $43 to make money.
And while some oil-dependent producing countries like Venezuela and Russia have seen their economies suffer, many refiners are licking their chops. Some Asian oil importers are soaking up record volumes of Mexican crude in particular, as fixed-dollar discounts to rapidly falling benchmarks have slashed sales prices from the country to unprecedented lows.
In early-December, Mexico's state-owned Pemex offered Asian buyers a discount on Maya crude for January lifting of about $12 a barrel to the underlying price marker, an average of Oman and Dubai prices.
But with oil prices falling more than $10 since then, that discount effectively cut the price in half to about $12.50 a barrel on Monday.