Oil markets OK, says IEA

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KUALA LUMPUR, Malaysia, June 8 (UPI) -- Oil suppliers and international companies are prepared for potential market shortages from sanctions against Iran, the IEA executive director said.

A European embargo on Iranian crude oil goes into effect July 1. U.S. sanctions pressure on Iran prompted some Western countries to cut back on Iranian crude oil imports.

International Energy Agency Executive Director Maria van der Hoeven told CNBC on the sidelines of an international energy conference in Malaysia that oil markets were braced for the potential Iranian disruption.

"What we have seen in the last few months is that there is a lot of extra oil in the market ... and on the other hand we can see that industry has been preparing itself as well -- building up its reserves, building up its storage," she said.

"Everybody is prepared for what might happen when the Iranian sanctions will be in full swing."

Early 2012 threats from Iran to close key oil-shipping lanes in the Strait of Hormuz pushed oil prices to historic highs, though markets have settled in recent months.

Major oil producer Saudi Arabia had provided assurances to Western allies that oil markets would be well-supplied.

When conflict in Libya last year disrupted oil production, the IEA called on member states to release oil from strategic petroleum reserves to offset market liquidity concerns.

Van der Hoeven suggested it was unlikely that the IEA would call for another strategic release after the July deadline passes.