The IEA said despite easing tensions on the market, "there is no room for complacency: the path of market fundamentals for the rest of the year remains highly uncertain and geopolitical risks will likely continue to keep prices high".
The world's four biggest markets should dominate the demand story in 2012, the IEA said, with declines seen in the Europe and the US, but demand picking up slightly in China and more firmly in Japan.
Oil consumption in Europe "is in a dire state, matching the region's general state of economic malaise", but declining trends in North America seemed to be abating, the IEA said.
In China, demand is growing but "remains muted in comparison to the double-digit percentage point gains seen at the beginning of 2011", the agency noted.
The International Energy Agency said that demand for oil would increase in 2012 by 0.8 million barrels per day (mbd) to 90.0 mbd, with consumption in emerging countries "more than offsetting" declining demand in richer OECD countries.
On the supply front, the IEA said OPEC nations had begun to boost output in April in order to meet any potential supply shocks owing to the US-driven tensions with Iran.
The agency said that global supply increased by 0.6 mbd to 91 mbd in April and raised its call on expected output from OPEC in the third quarter of 2012 by 0.2 mbd to 30.9 mbd and by 0.4 mbd to 30.7 mbd for the fourth quarter.
But Iran remained a bit of a mystery, the IEA said, where crude output was unchanged at 3.3 mbd in April, but an approaching July sanctions deadline from the European Union promised uncertainty in the coming months.
The IEA said "countries such as Turkey and South Africa appear to have ramped up imports from Iran" despite the EU sanctions.
But the IEA warned that tracking Iranian exports has become increasingly difficult following reports that the National Iranian Tanker Company had ordered its vessels to shut-off their communication beacons.