09:22 AM EDT, 06/17/2025 (MT Newswires) -- Oil prices rose early on Tuesday on concerns the conflict between Israel and Iran could disrupt oil supply from the Persian Gulf even as the International Energy Agency (IEA) said global inventories are continuing to rise.

West Texas Intermediate crude oil for July delivery was last seen up US$0.80 to US$72.57 per barrel, while August Brent crude was up US$1.01 to US$74.24.

The rise comes as Israel and Iran continue to trade attacks after Israel last week launched strikes at Iran in an attempt to disable that country's nuclear-weapons program. The hostilities have not yet impacted exports from the Persian Gulf, which accounts for around 20% of global oil demand, but concerns over the supply threat are pushing oil prices higher.

"Without a disruption to supply, Brent would likely trade back below USD 70, while the opposite could see it trade above USD 80, highlighting a market where volatility remains firmly in the driving seat.," Saxo Bank noted.

The IEA on Tuesday lowered its 2025 demand-growth forecast by 20,000 barrels per day to 720,000 barrels per day in its June Oil Market Report even as it said inventories continue to rise as supply outpaces demand. The agency said global inventories rose for a third-straight month in April as production continues to rise from OPEC+ and producers outside the cartel.

"Global oil supply in May was up by 1.9 mb/d (million barrels per day) from a year ago, led in part by the unwinding of voluntary OPEC+ production cuts. For 2025 as a whole, world oil supply is projected to rise by 1.8 mb/d to 104.9 mb/d and by an additional 1.1 mb/d in 2026," the agency said.