The industrialized economies adviser based in Paris said that while the pace of increasing stock in oil eases during the second six months of 2016, as the supply from producers who are non-OPEC drops, unless something is done, the oil market could be oversupplied, pushing prices even lower.

The price of West Texas Intermediate, the USA crude benchmark, fell 3.1% to $27.58 as of 7:02 p.m. The price of Brent crude, the global benchmark, tumbled 2.5% to $28.05.

Increased supply of oil from Iran and concerns over demand growth in countries like India and China will drive oil prices yet lower in 2016 as output vastly exceeds consumption, Moody’s Investors Service has said.

A new International Energy Agency report suggests that oil prices could fall much further in 2016, potentially threatening the financial viability of new exploration projects supplied by the breakbulk industry.

Data from the American Petroleum Institute late Wednesday also showed that USA oil inventories grew by 4.6 million barrels last week, well above a Platts survey’s forecast for a gain of 2.9 million, sending oil even lower in late trade.

The benefits of cheap oil Historically, OPEC has cut production to support prices.

USA output will average 13.50 million bpd this year, the report said, down 380,000 bpd from 2015 and the largest drop outside OPEC.

Most analysts expect Iran’s full return to oil markets to be relatively slow due to the need to overhaul its infrastructure following years of under-investment, but the country is also estimated to have stored 12-14 million barrels of crude and 24 million barrels of condensates for immediate sale.

Analysts said Iran already had quite a lot of oil ready to sell.

While supplies outside OPEC proved “resilient” for most of last year, they shrank on an annual basis in December for the first time in three years, according to the IEA. Expectations for the lifting of sanctions have had a greater impact on the price of oil than the actual lifting.

On the supply side, Iran’s ramped up production following the end of economic sanctions offsets any slowdown from other oil-producing nations.