According to the International Energy Agency, Saudi Arabia (IEA) and United Arab Emirates could calm volatility in oil markets if the UAE pumped more crude.

Saudi Arabia and UAE are the oil producers that have the highest spare capacity. This could reduce global oil inventory shrinkage, which has been a factor in pushing oil prices up to $100 per barrel and increasing inflation globally.

In its monthly oil report, the Paris-based agency stated, “These risks have broad economic implications.”

According to the IEA effective spare capacity can fall to 2.5million barrels per daily (bpd), according to estimates. It is held up almost exclusively by Saudi Arabia and, in a less extent, by the UAE.

The IEA said that a successful conclusion to international negotiations with Iran may lift U.S. export sanctions and ease supply tightness. This would allow Iran’s oil market share of 1.3 million barrels per day to increase.

According to Toril Bosoni (head of the IEA’s oil markets division), supply and demand appear to balance in the first quarter, but will turn into a surplus or surplus by the end of the second quarter.

Oversupply of oil is not possible immediately due to the need to replenish low-quality stocks.

She said that she didn’t consider it a surplus, and did not believe there was a market for such large quantities.