(Reuters) – Saudi Arabia and the United Arab Emirates (UAE) could help to calm volatile oil markets if they pumped more crude, the International Energy Agency (IEA) said on Friday.

The UAE and Saudi Arabia are the two oil producers with the most spare production capacity and could help to relieve dwindling global oil inventories that have been among factors pushing prices towards $100 a barrel, deepening inflation worldwide.

“These risks, which have broad economic implications, could be reduced if producers in the Middle East with spare capacity were to compensate for those running out,” the Paris-based agency said in its monthly oil report.

The IEA said that effective spare capacity could fall to 2.5 million barrels per day (bpd) by the end of the year, held up almost entirely by Saudi Arabia and, to a lesser extent, the UAE.

A successful outcome to international talks with Iran could lift U.S. sanctions on the country’s exports and relieve supply tightness, the IEA added, gradually bringing 1.3 million bpd of Iranian oil back into the market.

Supply and demand look set to be balanced in the first quarter but are expected to flip into a surplus in the second quarter or second half of the year, said Toril Bosoni, head of the IEA’s oil markets division.

The need to refill depleted oil stocks, which in OECD countries have slumped to seven-year lows, means immediate oversupply is unlikely.

“We don’t see it as a huge surplus looming over the market,” she told reporters.