The global oil market is well supplied with about 1 million barrel per day of excess supply which will help keep a lid on prices, the head of the International Energy Agency said on Friday.
IEA Executive Director Fatih Birol said oil prices had temporarily gone up due to geopolitical events but have come down.
Oil prices in 2019 remained around $60 per barrel despite attack on Saudi Aramco's oil facilities, Iran oil going out of market and collapse of major oil producer Venezuela, he said.
"We did not see a major increase mainly because there is an abundance of oil production around the world coming from the US, Brazil, Canada, Norway and Guyana. There is a huge amount of oil," he told reporters after the release of IEA's 'India 2020 Energy Policy Review' here. "When we look at the coming year (2020), looking at demand and supply of oil, we see a well-supplied oil market with more than one million barrels per day of a surplus of oil in the market. So, there is no reason to worry for time being," he said.
Crude oil prices rose to a three-month high of almost USD 72 a barrel soon after Iranian air-strikes against US-Iraqi military bases but cooled off amid speculation that Tehran is opting for limited retaliation over the killing of its top general.
At the release event, India's Oil Minister Dharmendra Pradhan said volatility in crude oil prices was a source of deep concern for the country.
"Today, we are meeting in the backdrop of rising tensions in the Middle East and its impact on stability and security in the region. We remain deeply concerned about the crude oil price volatility," he said.
India is 84 per cent dependant on imports to meet its oil needs and any spike in global prices has a direct bearing on its economy. Not only imports but even domestic crude oil -- which forms the raw material for making petrol, diesel and other petroleum products -- is priced according to international benchmarks.
The Middle East accounts for more than two-thirds of the country's oil imports, with Iraq and Saudi Arabia being the top suppliers.
Iranian strikes followed the killing of General Qassem Soleimani last week on US President Donald Trump's orders. Tensions have flared between the two nations since the US re-imposed sanctions on Iran last year over its nuclear programme.
The flaring up of international oil prices has resulted in petrol and diesel prices rising in India.
The retail pump prices of petrol in Delhi have risen by 82 paise per litre since January 2 while diesel rates have gone up by Rs 1.09 per litre.
A litre of petrol in Delhi now costs Rs 75.96 per litre -- the highest since November 2018 -- and diesel is priced at Rs 69.05 per litre.
For an economy that is struggling to recover from a six-year-low growth rate of 4.5 per cent, a spike in oil prices poses a significant risk as it will not just stoke inflation but also lead to higher outgo on government subsidies on cooking fuel.
Birol, however, said the IEA does not make a price forecast. But, "in the absence of a major unexpected geopolitical event, looking at supply and demand of oil, we do not see any reason for prices to increase substantially in the next months to come as the markets are very well supplied."
This, he said, is good news for India which is the world's third-largest oil importing country. Its economy is closely tied to international oil prices.
Birol said IEA expects US shale production to continue to increase but the range of increase is going to slow.
"US will continue to be the No.1 oil producer of the world. But, in addition to the US, we are expecting a significant amount of oil coming from offshore Brazil, Norway, Canada and Guyana," he said.