Benchmark Brent crude oil was down 65 cents a barrel at $79.09 by 1200 GMT.
US sanctions on Iran's energy industry, which come into force in November, have already cut supply back to two-year lows, while falling Venezuelan output and unplanned outages elsewhere will also keep the balance between supply and demand tight, the IEA said.
Brent crude rose more than 1% to $80.13 - the first time it has breached $80 since late May.
USA crude futures were up 35 cents at $69.60 a barrel.
But keen not to see oil prices spike, US Energy Secretary Rick Perry met with Saudi Energy Minister Khalid al-Falih on Monday in Washington, as the Trump administration encourages big oil-producing countries to keep output high ahead of the renewed sanctions.
"Things are tightening up", the agency said in its monthly report, but added: "As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the United States dollar raising the cost of imported energy".
Russian energy minister Alexander Novak on Wednesday warned of the impact of USA sanctions against Iran.
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Russia, the United States and Saudi Arabia are the world's three biggest oil producers by far, meeting around a third of the world's nearly 100 million barrels per day of daily crude consumption. Novak did not provide details.
In its monthly report, OPEC said world oil demand next year would rise by 1.41 million barrels per day (bpd), 20,000 bpd less than last month and the second consecutive reduction in the forecast.
South Korea has made a decision to comply with USA demands to cut oil imports from Iran to zero, becoming the first to do so out of the top three buyers.
Short-term, the outlook is for tighter supply.
"Market participants are now evaluating this development in conjunction with potential for further declines in oil output from Iran and Venezuela, which portrays a significantly bullish picture on prices", said Abhishek Kumar, senior energy analyst at Interfax Energy in London. Oil production has been hit by attacks on oil facilities and blockades, though a year ago it partially recovered to around one million barrels per day. Who's right? In this brief podcast (4:15) suggests that a story the media is paying little attention to seems to indicate that, overall, oil market risk is rising.
At the same time, American oil producers are seeking new buyers for crude they used to sell to China before orders virtually dried up because of the trade disputes between Washington and Beijing.