New York-based Moody’s Investors Service announced on Thursday that it is slashing its expectations for oil prices and putting Canadian mining and energy companies on review for possible downgrade.

The credit rating agency has sharply cut its price estimates for both Brent crude and West Texas Intermediate (WTI) crude, citing “continued oversupply in the oil markets and the risk of additional supply from Iran,” Moody’s says in a statement.

Moody’s has lowered its price estimate in 2016 for both Brent crude, the international benchmark, and WTI crude, the North American benchmark, to US$33/barrel (bbl). This represents a $7/bbl reduction for WTI, and a $10/bbl cut for Brent crude. Moody’s also says that it expects both prices to rise by $5/bbl on average in 2017 and 2018.

“OPEC countries continue high levels of production in the battle for market share, contributing to the current oil glut despite moderate consumption growth by key consumers such as China, India and the U.S.,” says Terry Marshall, senior vice president at Moody’s. “In addition, we expect the rise in Iranian oil output this year to offset or exceed production cuts in the U.S.”

Moody’s has also placed the ratings of 19 energy exploration and production (E&P), and oilfield services companies on review for downgrade, citing the weakness in prices. Multi-notch downgrades are particularly likely among companies whose activities are centered in North America, the Moody’s statement says, where natural gas prices have declined dramatically alongside oil prices.

“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,” Moody’s says. “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.”

Additionally, the firm also put 12 Canadian mining companies on review for downgrade, citing “the fundamental shift in the credit conditions” in the global mining sector.

“Slowing growth in China, which consumes and produces at least half of base metals, and is a material player in the precious metals, iron ore and metallurgical coal markets is weakening demand for these commodities and driving prices to multi-year lows,” says Jamie Koutsoukis, vice president and senior analyst at Moody’s. “China’s outsized influence on the commodities market, coupled with the need for significant recalibration of supply to bring the industry back into balance indicates that this is not a normal cyclical downturn, but a fundamental shift that will place an unprecedented level of stress on mining companies.”