The global oil market is “walking a tightrope” between scarce supply and the possibility of a recession, the International Energy Agency (IEA) said on Wednesday, with higher prices and worsening economic conditions already taking a toll on demand.

“Rarely has the outlook for oil markets been more uncertain. A worsening macroeconomic outlook and fears of recession are weighing on market sentiment, while there are ongoing risks on the supply side,” the Paris-based agency said.

“For now, weaker-than-expected oil demand growth in advanced economies and resilient Russian supply” has reduced market tightness, the IEA said in its monthly oil report.