Iran 's oil exports are already rebounding after an interim deal with the West but the Islamic Republic won't flood markets even if international sanctions are lifted, the International Energy Agency said Wednesday.

The IEA, the top energy watchdog, said global oil demand will be higher than expected next year and that could push up oil prices amid persistent production disruptions.

In its closely watched monthly oil market report, the IEA said preliminary estimates indicate that receipts of Iran 's crude oil and condensate exports rose by 89,000 barrels a day in November, to 850,000 barrels a day as the Chinese bought more and shipments to Taiwan resumed.

By contrast, the agency had said last month that Iran 's crude exports had reached their lowest level in 21 months in October.

The Iranian oil export rebound comes as, on Nov. 24, Iran and six world powers agreed to a partial easing on international restrictions in exchange for Tehran scaling down its nuclear program.

The shipments would have been arranged before the sanctions relief agreement suggesting the situation of the country's embattled oil industry is already improving.

Tanker data show Iran withdrew 15 million barrels out of its bloated floating storage while its production rose by 13,000 barrels a day to 2.71 million barrels a day in the past two months, the IEA said.

While capping Iranian crude oil exports to 1 million barrels, the nuclear pact allows the resumption of insurance on Iranian oil voyages--thus removing what had been a key impediment to Tehran 's crude exports.

"The lifting of insurance restrictions does not open the floodgates for Iran oil exports," the agency said. But restrictions on Iranian sales to Asia and a blanket European Union oil embargo "remain fully in place [which] leaves on the face of it no room for any sustained increase in exports."

The agency said that, even if all sanctions on Iranian oil were eventually relaxed, the country would need sizable investment to boost production and would still face competition in a market crowded with Iraqi and U.S. barrels.

"Meaningful increases in production would require a longer period and additional investment in Iran 's upstream, and thus would take time to materialize," the IEA said. Making room for Iran could also "be a challenge for other producers, especially in the face of rising non-OPEC supplies."

 Iraq has said it would keep on boosting production, which now stands at 3 million barrels a day--its highest sustained level in at least 20 years. Meanwhile, the IEA said that, in November, non-OPEC crude output topped 43 million barrels a day for the first time in decades largely due to a U.S. shale boom. Total non-OPEC production is now forecast to rise by 1.7 million barrels a day for 2014, it said.

This increase in supply would be absorbed by higher-than-expected global oil demand that the IEA raised by 130,000 barrels a day for this year and 240,000 barrels a day in 2014 due to a colder winter than initially forecast and more robust economic growth.
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