Oil prices are in the tank worldwide, but a confluence of factors has caused the value of Alaska oil to also start swinging wildly in recent days.

Alaska Department of Revenue officials reported the price for a barrel of Alaska North Slope crude fell to $18.21 in early April, down nearly $10 per barrel from the day prior for an astonishing drop of 35 percent in a single day. Prices a week later were even lower.

Oil prices that low for an extended period would likely bring a whole new level of austerity in Alaska' oil industry and state government, which relies heavily on funding from petroleum tax and royalty revenue.

The last time Alaska oil traded so cheaply was early February 2002, but at that time producers were pumping more than 1 million barrels per day from North Slope fields; these days that production averages just less than 500,000 barrels.

While the single-day price drop was dramatic and largely unprecedented, it was made more unusual by the fact that it seemed to be unique to Alaska North Slope, or ANS, crude.

Benchmark prices for oil in other markets around the world also fell, but not nearly as sharply. The price for West Texas Intermediate, the benchmark for Lower 48 oil, fell $2.45 to $23.63 per barrel and Brent benchmark prices fell $1.18 per barrel to $31. 87. Brent is the primary benchmark price for many of the water-borne oil trades made worldwide. The name originated from the Brent oil field in Europe's North Sea.

In recent years ANS oil has been priced close to Brent — as they are both traded via oil tankers — and at a significant premium to West Texas Intermediate.

The daily Department of Revenue report with the $18 price included an unusual disclaimer noting that the ANS price drop "independent of Brent and WTI is linked to a trade heard done, at a lower than previously reported price."

Chief Revenue Economist Dan Stickel wrote in an email that excess supply, which includes oil sales from Saudi Arabia and other OPEC countries, to the West Coast, has simply saturated that market.

The vast majority of ANS oil is exported from Valdez to West Coast refineries and transportation constraints limit the amount of oil produced east of the Rocky Mountains that can be sent west. That soft barrier has led to the development of ostensibly two oil markets in the U.S.

The situation also highlights how determining the actual price of ANS crude is "part science and part art," as Revenue officials have described it, while other oil prices are openly traded on real-time markets.

The relative isolation of the ANS-West Coast market means, per state regulations, Revenue officials rely on prevailing ANS values reported by Platts and Reuters reporting services and the outlets draw their information from industry sources.

Argus Media, a similar energy markets reporting service cited by the Department of Revenue, reported that ANS oil has been competing with Middle East oil at West Coast refineries in recent weeks as producers and shippers worldwide look for places to offload their oil.

According to the Energy Information Administration, oil imports to the West Coast averaged 349,000 barrels per day over the four weeks ending April 3, which was an increase of 4 percent over last year.

Russian and Saudis leaders had been engaged in a month-long oil price war after the two major global producers could not reach an agreement to cut production in an attempt to stabilize global oil markets when prices began falling from the mid-$60s plateau in late February.

The countries, along with other OPEC members, agreed in principle to jointly commence major production cuts Thursday, but to what extent the deal will hold remains to be seen.

Oil prices started a steady but fairly slow fall prior to the production dispute as China's coronavirus-induced lockdown weakened global oil demand. The collapse in demand has subsequently followed the virus' spread worldwide.

The ANS price quickly rebounded to $25.33 per barrel to closely mirror the West Texas-priced crude following reports of the Saudis-Russian truce, but Department of Revenue officials said they expect to see ongoing volatility in the overall price of Alaska oil as well as its price relative to the other benchmarks.

That's because even if those countries cut production by millions of barrels per day, demand has fallen off so dramatically that the global supply will remain overly plentiful.

"We are hearing of significantly reduced motor fuel as well as reduced refinery runs on the West Coast — due to both lower demand as well as COVID-19 infections in refinery staff," Stickel wrote as well.

Revenue officials said they heard from multiple sources that one or more deals for ANS crude were done near the $18 price in recent days, which was attributed to the fact that there simply isn't storage capacity for all of the oil that's being produced right now.

Recent reports worldwide have indicated oil tankers are being used as storage vessels in some instances where traditional storage means are full.

According to Department of Revenue data, the storage tanks at the Valdez Marine Terminal operated by Alyeska Pipeline Service Co. were roughly two-thirds full on April 8, holding 4.6 million barrels of oil.

Alyeska spokeswoman Kate Dugan said the tanks at the terminal are not managed as long-term storage. The terminal inventory is managed by working with shippers and carriers on tanker scheduling and Alyeska hasn't changed its approach to managing the system, according to Dugan.

"We will continue to work closely with shippers and carriers in the months ahead," she wrote in an email.

A BP Alaska spokeswoman declined to comment on the price situation and ConocoPhillips representatives did not respond to questions.

Sens. Dan Sullivan and Lisa Murkowski have been asking the Trump administration to press Saudis officials for weeks to stop flooding oil markets as well as urging the administration to work on ways to refill the Strategic Petroleum Reserve.

Alaska's senators said they will be introducing a bill approving $3 billion for the Department of Energy to purchase domestic oil for the reserve when Congress reconvenes following Easter. Such a provision was left out of the final $2.2 trillion Coronavirus, Aid, Relief, and Economic Security (CARES) Act passed last month.

Murkowski spokeswoman Grace Jang wrote in an email that the senator is advocating for a diplomatic resolution to the oil price war but noted that a ban on oil imports is an option if Saudi Arabia and Russia "continue to engage in economic warfare against the U.S. energy industry."

Murkowski chairs the Senate Energy and Natural Resources Committee.