The International Energy Agency on Tuesday warned oil prices could fall again as Iranian output increased as part of a broader surge in OPEC production.

The news comes after oil sanctions against Tehran were lifted and members of the Organization of the Petroleum Exporting Countries failed to agree on output cuts.

“It is very hard to see how oil prices can rise significantly in the short term. In these conditions the short-term risk to the downside has increased,” the IEA said in its closely watched monthly oil-market report.

OPEC’s crude oil output rose by 280,000 barrels a day in January to 32.63 million barrels a day, said the energy watchdog, which advises some of the world’s largest oil consumers.

The boost was driven by sanctions-free Iran, whose output rose by 80,000 barrels a day in January to 2.99 million barrels a day.

Saudi Arabia also increased its production by 70,000 barrels a day to 10.21 million barrels a day. Meanwhile, Iraq set a new output record of 4.35 million barrels a day thanks to increased production of 50,000 barrels a day.

“Persistent speculation about a deal between OPEC and leading non-OPEC producers to cut output appears to be just that: speculation,” the IEA said.

Adding to global oversupply, commercial oil stocks in industrialized nations rose by 7.6 million barrels in December to stand at 3,012 million barrels and they continued to rise in January, the IEA said.

Global oil supplies, however, dropped by 0.2 million barrels a day to 96.5 million barrels a day in January, as higher OPEC output only partly offset lower non-OPEC production. Non-OPEC supplies slipped by 0.5 million barrels a day from the previous month, the IEA said, as lower oil prices forced costly North American producers to shut some of their production.

But high OPEC production and slowing demand mean a global oil surplus will be worse than previously expected. The IEA foresees a stock build of 2 million barrels a day this quarter followed by a 1.5 million barrels a day build in the second quarter.