Presenting its latest monthly report, the International Energy Agency said Wednesday the decision by US President Donald Trump to withdraw from the Iran deal had "switched the focus of oil market analysis from the fundamentals to geopolitics."

Oil prices, which had already risen on the back of steady demand growth and a landmark deal by oil producing countries to lower output, had now surged to above $77 per barrel the IEA noted.

"In these early days, there is understandable uncertainty about the potential impact on Iran's oil exports" because of US sanctions, it said. When sanctions were imposed back in 2012, Iranian exports dropped by about 1.2 million barrels per day.

The IEA said it would have to examine whether other producers could step in to ensure an orderly flow of oil to the market and "offset a disruption to Iranian exports."

Shortly after the US announcement, Saudi Arabia acknowledged the need to work with producers and consumers to mitigate possible supply shortfalls.

Not the only headache

IEA officials stressed that crisis-hit Venezuela was another risk to the global oil supply. "In Venezuela, the pace of decline of oil production is accelerating and by the end of this year, output could fall by several hundred thousand barrels a day."

Oil demand at the start of 2018 was supported by cold weather in the US and Europe as well as by new petrochemical capacity in the US.

"While the economic environment will continue to support oil demand, assistance from harsh weather conditions will vanish, and the recent jump in oil prices will take its toll," the agency argued.

hg/jd (AFP, dpa)