Concerns about the lack of available oil on the market have faded, but it may be the calm before a storm triggered by U.S. sanctions, a market report found.

"Concerns about the stability of oil supply have cooled down somewhat, at least for now," the monthly market report from the International Energy Agency read.

Libyan oil production was sidelined mid-summer by conflict in the country's western oil belt, adding to concerns about a steady loss of output from Venezuela. In July, meanwhile, Swiss investment bank UBS found spare capacity, the amount of oil a producer can add to the market in short order, could fall to a 10-year low within the next year.

That's a concern in a market where the Organization of Petroleum Exporting Countries drained the large surplus in global oil through a coordinated agreement on production restraint. OPEC's effort, with help from non-member state producers like Russia, helped pull oil prices out of a historic slump, though the market is now close to balance, meaning there's little room for unexpected supply-side shocks.

The IEA said concerns about the lack of ample supply has been offset by production growth in Russia and Saudi Arabia, two of the strongest producers in the OPEC-led effort. Libya, meanwhile, has shown signs of stability and the United States, on pace to become a global leader in oil production, is exporting more of its product to the world market.

"The recent cooling down of the market, with short term supply tensions easing, currently lower prices, and lower demand growth might not last," the IEA's report read. "When we publish our next report in mid-September, we will be only six weeks away from the U.S.'s deadline for Iran's customers to cease oil purchases."

Citing unnamed sources, Bloomberg News reported Friday that U.S. sanctions on Iranian oil that go into force in early November could cut Iranian exports by somewhere between 700,000 barrels per day to 1 million barrels per day, in line with the consensus estimate.

That makes the warning from UBS more impactful as few countries have any real spare capacity to add to the market. In July, a senior U.S. State Department official said the Trump administration was "very serious" about imposing sanctions on Iran's oil, but at the same time "very confident" Saudi Arabia and other producers can take up the slack.

On the demand side, the IEA said the outlook is relatively subdued for the rest of the year. Demand growth accelerates next year, "but there are risks to the forecast from escalating trade disputes and rising prices if supply is constrained."

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