On Monday, OPEC ministers warned that high oil prices could place a strain on the economies of their consumers a day after Saudi Arabia announced that it had to significantly reduce its output in March because of the lack of demand. In fact, Ali al-Naimi, the Saudi Oil Minister reported that his kingdom had cut the output by more than 800,000 barrels per day in March alone due to the weak demand for their product.
Nobuo Tanaka, who is the Executive Director of the International Energy Agency, followed OPEC’s report on Monday by saying that if the oil prices stayed at the levels they’re at now, that it could cause another recession similar to the one that happened in 2008. “Already we are seeing some indication of the slowdown in demand, and it’s alarming”, said Tanaka to Reuters.
Unrest in the Middle East and North Africa has supported this trend in oil prices. The relations between Saudi Arabia and Iran, the two top producers for OPEC, have been strained by the anti-government protests in Bahrain in which their neighboring country, Saudi Arabia, has sent in forces to help support the Bahraini troops.