The report was released by the Nairobi-based charity ahead of next week's International Monetary Fund (IMF)/World Bank yearly meeting.
"The economic crisis...is deeper than the 2008 global financial crisis," the report said.
"The estimates show that... global poverty could increase for the first time since 1990," it said, adding that some countries could return to poverty levels last seen thirty years ago.
The report examined several possible economic outcomes based on the World Bank's measure of poverty. People under extreme poverty live on $1.90 a day or less. And those at a lesser poverty level live on less than $5.50 a day.
The most serious outcome would be a 20 percent decrease in earnings. It would cause 1.2 billion people to live in extreme poverty worldwide. It would also raise the number of people living in poverty to nearly 4 billion.
Women are at more risk than men because they are more likely to work in jobs that have little or no protection.
Poor people cannot take time off from work or buy food in large amounts, the report warned. It also said more than 2 billion people did not get earnings while they are sick.
To lessen the effects on poverty, Oxfam suggested a plan that would give money to people and businesses in need. It also called for debt cancellation, more IMF support and increased aid to poor countries.
Oxfam added that additional taxes on wealth, high profits and some financial tools favored by the wealthy would help raise the money needed.
Calls for debt cancellation have increased recently as the COVID-19 pandemic has affected the economy of developing countries around the world.
Wealthier countries around the world would need to give at least $2.5 trillion to help developing nations, the report said, adding that wealthier countries have shown they can raise that amount to help their own economies.
The United States, for example, recently released a $2.2 trillion spending plan to rescue the country's economy. China, Japan and some European nations have also passed their own spending measures.
The report said, "Unless developing countries are also able to fight... the crisis will continue and it will inflict even greater harm on all countries, rich and poor."
I'm Jonathan Evans.