High fuel prices and a weakening economy are starting to hit demand for oil, according to the International Energy Agency (IEA).
Demand fell by more than expected in April across member nations of the Organisation for Economic Co-operation and Development in the Americas, Europe and Asia.
Road fuels were impacted the most, suggesting prices have begun to afflict demand.
"Rarely has the outlook for oil markets been more uncertain," the agency said in it's monthly report.
"A worsening macroeconomic outlook and fears of recession are weighing on market sentiment, while there are ongoing risks on the supply side.
"For now, weaker-than-expected oil demand growth in advanced economies and resilient Russian supply has loosened headline balances. Benchmark crude futures have tumbled by more than $20/bbl since early June, trading below $100/bbl at the time of writing.
"Yet, persistent physical crude price tensions and extreme refinery margins highlight underlying imbalances for crude and products supply."
The agency reiterated its warnings that usage restraint may be necessary to avoid “fuel costs that pose a threat to stability, most notably in emerging markets".
It adds: "Without strong policy intervention on energy use, risks remain high that the world economy falls off track for recovery."
Brent crude, the global benchmark oil price, surged as high as $139 a barrel in the weeks after Russia’s invasion of Ukraine and has remained above $100 a barrel for most of the time since then.
'Darkening' global economic outlook
Meanwhile, the head of the International Monetary Fund has said it will downgrade its expectations for global economic growth this month.
Its most recent forecast, issued in April, was for 3.6% growth this year and next.
Kristalina Georgieva told the BBC the war in Ukraine, higher than expected inflation, and the ongoing Covid pandemic are to blame.
These are making the cost of living crisis worse for millions, she said, adding that the poorest are suffering the most.
It comes as inflation in the US - world's biggest economy - reached 9.1%, the highest in more than 40 years.