In a separate report on the outlook to 2030, the IEA forecast that oil supply would continue to outstrip demand over the next five years. Global oil demand is expected to increase by 2.5mn b/d between 2024 and 2030, reaching “a plateau” of 105.5mn by the end of the decade.

The Indian rupee is likely to dip at the open on Tuesday, weighed down by rising oil prices and a decline in U.S. equity futures after U.S. President Donald Trump called for the evacuation of Tehran.

If prices go up, Fed officials may be inclined to raise its benchmark rate, raising borrowing costs for businesses and consumers. That could lead to businesses to cut jobs, particularly in the high-growth tech sector, and force Americans to pull back on spending, which drives more than 70% of economic activity in the U.S.

Iranian missiles damaged the US embassy in Tel Aviv, escalating tensions. Israel retaliated with strikes on Iran's energy sector, while both sides continued attacks.

Global energy executives gathered in the Malaysian capital on Monday for an industry conference with an eye on the dramatic escalation in the conflict between Israel and Iran, which has fuelled worries that it could widen and disrupt supply.

Oil supplies from the Middle East face increasing risk as the conflict between Israel and Iran drags on, according to RBC Capital Markets LLC, which warned that energy is now “clearly in the crosshairs.