Oil prices spiked in the first quarter of 2012 after Iran threatened to close key oil shipping lanes in response to tightened sanctions. As more countries move away from Iranian crude, meanwhile, Saudi Arabia has ramped up production to meet market demands.
Members of the Organization of Petroleum Exporting Countries, during their regular meeting in Vienna this week, opted to keep production quotas in place despite slumping crude oil prices.
The International Energy Agency described oil markets as well-supplied. Jason Schenker, president of commodity research company Prestige Economics, told Bloomberg News that Saudi Arabia would have to clamp down on supplies should oil prices slump further.
"It puts some of the onus on the Saudis but, at the end of the day, they're going to remain very responsive to what happens in the world market," he said.