Major Middle Eastern oil producers will step in to fill any gap caused by supply shortages this year, the IEA's chief economist Fatih Birol said on Friday, while global energy demand will eventually recover from a fall caused by economic slowdown.

Oil demand is falling for the first time since the global economic crisis of 2008-2009, the International Energy Agency, which advises industrial countries on energy policy, said in January. It cut its 2012 demand growth forecast by 220,000 barrels per day from its previous monthly report to 1.1 million bpd.

"We may see a slowing down of global energy demand this year because of the slowing down of the economy," Birol told a seminar in Seoul.

"But we'll still see global growth in demand (in the longer term), unless we see a major recession from European countries."

The Paris-based IEA also said last month that a European Union embargo on Iranian oil would start affecting supplies from around the middle of 2012, giving customers time to find alternative sources of supply.

Oil consumers, including Asian countries, are struggling to find alternative crude suppliers as U.S. sanctions on Iran make it difficult to import Iranian oil.

Birol said many key producers in the Gulf region would make up for any shortfall in oil supply. Iraq might be the next big supplier of the global oil market in coming years, he added.

In December he said that oil prices, then at $109 a barrel, already posed a "major risk" to the fragile global economy, and could rise further to $150 in coming years if there was no more investment to boost oil output in the Middle East.

On Friday, with Brent crude slipping towards $118 a barrel, Birol urged oil producers to try to aid consumers.

"The current oil price is too high, the oil producing countries will have to consider doing something about it and help their consumers. They should know that if their consumers go down, their own business will go down as well."

Securing oil supplies is a key priority for South Korea, Asia's fourth largest economy and the world's fifth largest importer of crude. Korea, a close U.S. ally, buys nearly 10 percent of its crude needs from Iran, and President Lee Myung-bak is touring Gulf oil producers this week to seek alternative sources.

"We are worried about the Iran crisis and are always trying to be prepared for any upcoming risks," Cho Seok, the South Korean vice minister of knowledge economy, told Friday's seminar. – Reuters