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The International Energy Agency said on Wednesday that the global oil market was walking a “tight rope” between supply shortages and a potential economic slowdown, with demand already hit by high prices and deteriorating economic conditions.

“The outlook for oil markets is more ambiguous than it is now,” the Paris-based firm said. Lowering macroeconomic expectations and fears of a recession are weighing on the market’s direction, while risks remain on the supply side.

“So far, weaker-than-expected oil demand growth in developed countries and flexible Russian supplies” have mitigated the impact of market shortages, the company added in its monthly oil report.

However, demand expectations are down by just 200,000 barrels per day in 2022, and the market is on track to record annual growth of 1.7 million barrels per day this year and 2.1 million barrels per day in 2023, before reaching 101.3 million barrels. Day is supported by the development of developing countries.

On the other hand, the company said Russian export revenue rose by $700 million month-on-month as oil prices rose, despite Russian oil exports hitting their lowest level since last August.

These profits have supported military operations between Russia and Ukraine, which the company says is “impossible”.

“Consultations are ongoing to define a robust market mechanism to ensure effective implementation and (regulation of Russian oil prices),” it added.

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