Credit evaluator Moody's has placed the ratings of 120 oil and gas firms worldwide under review for possible downgrade due to plunging prices.
"These reviews reflect a mix of declining prices that are near multi-year lows, weakening demand and a prolonged period of oversupply that will continue to significantly stress the credit profiles of companies in the oil and gas sector," it said.
"The actions also reflect Moody's effort to recalibrate the ratings in the oil and gas portfolios to align with the fundamental shifts in credit conditions," the agency added.
About half of the firms under review come from the US.
"Oil prices have deteriorated substantially in the past few weeks and have reached nominal price lows not seen in more than a decade," Moody's said.
"We see a substantial risk that prices may recover much more slowly over the medium term than many companies expect, as well as a risk that prices might fall further," it added.
"Even under a scenario with a modest recovery from current prices, producing companies and the drillers and service companies that support them will experience rising financial stress with much lower cash flows," the agency said.
Crude prices have been hammered during the past three weeks, falling about 75% in 18 months on a supply glut, weak demand, overproduction and a slowing global economy.
Adding to downside pressure is the return of Iranian crude into the market after the lifting of Western sanctions, offsetting any output cuts from other countries.
Earlier in the week, US benchmark West Texas Intermediate sank to as low as $26.19 and Brent tumbled below $28 - both at more than 12-year lows.
