Warnings that the North Sea oil industry faces a further grim year ahead have been sounded after the price of Brent crude hit a new seven-year low.

The benchmark price dropped below $39 a barrel for the first time since December 2008 amid forecasts the current glut will grow, putting further pressure on Scotland's economy.

The International Energy Agency or IEA - the body representing oil importing nations - warned of global oversupply throughout 2016.

Some analysts believe the price could fall even further as the world runs out of space to even store unwanted crude.

Russia - Europe's biggest producer - on Friday signalled that it was preparing for a "different reality" of oil prices hovering between $40 and $60 for the next five-to-seven years.

The country's stated readiness for an era of lower prices is the latest in a act of price brinkmanship with Saudi Arabia, which, along with other members of the one-time cartel OPEC, is pumping out the highest volume of crude for years.

Such forecasts have seen at shiver through north-east Scotland, where costs are far higher than in other major producing areas such as the Middle East or Venezuela.

Aberdeen-based Wood Group announced that it had cut 1000 jobs since June and signalled further cuts to come in the New Year.

Industry-wide estimates suggest 5500 positions have already been shed in the North Sea.

The market crash does mean falling heating and transportation costs for Scottish business and consumers. Asda cut its pump price to under £1 a litre for petrol this weekend.

But Professor Alex Kemp of Aberdeen University, the country's leading oil analyst, warned of more developments in the North Sea would be put on ice as firms sought to cut costs.

Prof Kemp said: "Saudi Arabia is producing at a very high level.

"Overhanging the market is the prospect of Iran being a significant producer again if and when sanctions are lifted.

"Demand is only growing at a modest rate so the market makers at the moment see a negative signals of production outstripping demand.

"Looking ahead it is difficult to see the fundamentals changing very much.

"Iran has a large amount of oil in tankers, ready to be sold when sanctions go.

"For the North Sea, 2016 will be a tough year on top of the tough year of 2015.

"At $40 quite a few fields will be struggling to cover all their costs. A lot of projects have been put on hold."

Prof Kemp did see some some light at the end of the tunnel. He believes prices could recover in 2017 - just as the North Sea benefits from "painful" cost-cutting.

He added: "Some of the project projects in ice may get the go-ahead."

UK Oil and Gas, which represents producers, said it would continue to try to reduce costs to ensure a long-term future.

The latest round of price cuts comes after a bad-tempered meeting of Opec broke up without agreement on lower production in a bid to end the glut.

One American broker summed up the mood on Friday after the forecast from the IEA, which was set up in the wake of the oil shocks of the early 1970s after Opec agreed to cut production and raise prices.

Peter Donovan of Liquidity Energy in New York said: "It's very tough to find cause to get bullish here.

"The IEA report has put further selling pressure on an already soft market. It dispelled thoughts that a price recovery was on the not-too-distant horizon."

Some experts believe the Saudis are trying to force Russia to join Opec, creating a new cartel to control half the world's oil supply. The future of the North Sea and Scotland's economy, they suggest, could depend on who blinks first in the stand-off between Riyadh and Moscow.