The tension between Iran and its international partners and attacks on oil tankers in the Strait of Hormuz are a major concern, says Fatih Birol, Executive Director, International Energy Agency (IEA).

Talking to CNBC-TV18, Birol said peace and stability in the region were important for India and other Asian countries. "A big chunk of the oil and natural gas coming to India is passing through the strait. The economies in this region would be adversely affected if the strait is closed because of tensions,” he observed.

India receives about two-thirds of its oil through the Strait of Hormuz and the same goes for China, Japan and South Korea.

Speaking about the global oil demand, Birol said: “We expect an increase of about one million barrels per day this year. It is lower than the previous year mainly because the global economy is not having the best days. Chinese economy, the driver of the global energy demand, is slowing.”

According to Birol, the good news for India and other oil importing nations is that a lot of oil is coming to the market from the United States, Iraq and Brazil, which puts a downward pressure on the prices.