(Bloomberg) -- Oil plunged after a report that Israel may avoid targeting Iran’s crude infrastructure eased concerns over a major supply disruption, bringing traders’ focus back to the International Energy Agency’s expectations of a sizable glut early next year.

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West Texas Intermediate slid as much as 5% to fall near $70 a barrel. Brent futures slumped below $74.

Israel said it was weighing US warnings against striking Iran’s energy sites, but that it would act based on its own assessments, after the Washington Post reported that Prime Minister Benjamin Netanyahu told the Biden administration he’s willing to strike military rather than oil or nuclear facilities in Iran.

While those tensions pose a danger to the region’s energy infrastructure, there’ll be an oil-market glut in early 2025, the IEA warned on Tuesday. The agency made small cuts to its demand growth forecasts and said spare capacity in OPEC+ is near record levels.

Crude prices have been on a roller coaster in recent weeks as traders track an escalating conflict in the Middle East — home to about a third of global supply — after Israel vowed significant retaliation to an Oct. 1 missile barrage from Iran. That had offset concerns about slowing growth in key markets, including China.

“Oil prices sold off heavily this morning following the latest comments from Israel that it will avoid targeting Iran’s oil infrastructure,” ING analysts Ewa Manthey and Warren Patterson wrote in a note. “This has removed a big overhang for the oil market in the immediate term.”

Brent declined 2% on Monday after China’s highly anticipated Finance Ministry briefing over the weekend lacked specific new incentives to boost consumption in the world’s biggest crude importer. Adding to the gloom, OPEC joined a chorus of others projecting weakening demand growth, trimming its forecasts for this year and next for a third consecutive month.

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--With assistance from Antonia Mufarech.

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