Oil from Canada’s tar sands has skidded towards $20 a barrel, a level not seen for international crude prices in 12 years, tightening the screws on energy companies and the economy of the world’s fourth biggest supplier. This week, Western Canada Select, a marker for heavy, diluted bitumen from Alberta’s oil sands region, fell to $23. It was less than half the price of Brent, the global oil benchmark listed in London. “Western Canada Select is the world’s cheapest crude oil in a world where we already have low prices,” said Jackie Forrest, vice-president of energy research at ARC Financial in Calgary. A combination of steadily rising production, pipeline constraints and a surprise outage at a US refinery explain the 50 per cent fall in Canadian oil since July 1. The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and colouring the debate ahead of an October federal election.