The oil price is set to fall further this year as supply vastly exceeds demand, with major oil exporter Iran's return to the market offsetting any production cuts from other countries, the IEA said on Tuesday.

"Can it go any lower?" the International Energy Agency asked in its monthly oil market report. "Unless something changes, the oil market could drown in over-supply. So the answer to our question is an emphatic yes. It could go lower."