With ever-increasing sectarian tensions in oil-producing countries, it may be hard to believe that crude prices are continuing to fall. But look no further than the worldwide crude glut for the reason, said Helima Croft, global head of commodity strategy at RBC Capital.
"We had ISIS attacks on Libyan facilities last week, and the market just shrugged it off," Croft told CNBC's "Worldwide Exchange" on Monday. "If this had been a couple of years ago and we were having this conversation, oil would be substantially higher."
The perception of oversupply is stronger than ever, said Croft. "You literally need to see a physical supply disruption out of Saudi Arabia for anyone to get excited."
Global oversupply and weak demand have driven prices down since 2014, the last time crude traded above $100 a barrel. U.S. companies have since pulled back on exploration, and production continues to drop.
"Last year was exceptional, we were at a five-year high for demand and look where prices were," Croft said, noting crude finished January 2015 at more than $50 per barrel.
U.S. oil, as measured by West Texas Intermediate crude, dipped below $32 per barrel in late-morning trading Monday, hitting fresh 12-year lows. WTI lost more than 10 percent last week and about 70 percent since June 2014.
Croft said Middle Eastern producers were expecting to see prices bounce back by now.
"They did not expect we'd be in this price environment with U.S. production slowing," she said. "The Saudis are taking on austerity measures to try and endure lower for longer."