Investing.com-- Oil prices rose Tuesday as traders digested the latest monthly IEA report while ongoing tensions in the Middle East provided support.

At 06:15 ET (10:15 GMT), Brent oil futures for August rose 1.7% to $74.48 a barrel, while West Texas Intermediate crude futures gained 1.7% to $71.44 a barrel.

Both contracts have seen volatile trading Tuesday, rising more than 2% earlier in the trading session but also notching declines.

Global demand to keep growing this decade - IEA

Global oil demand will keep growing until around the end of this decade despite peaking in top importer China in 2027, as cheaper gasoline and slower electric vehicle adoption in the United States support consumption, the International Energy Agency said on Tuesday.

Oil demand will peak at 105.6 million barrels per day (bpd) by 2029 and then fall slightly in 2030, a table in the Paris-based IEA’s annual report shows. At the same time, global production capacity is forecast to rise by more than 5 million bpd to 114.7 million bpd by 2030.

"Based on the fundamentals, oil markets look set to be well-supplied in the years ahead," said IEA Executive Director Fatih Birol in a statement. "But recent events sharply highlight the significant geopolitical risks to oil supply security," Birol said.

Trump says ‘everyone should evacuate Tehran’

Trump on Monday evening said in a social media post that ‘everyone should evacuate Tehran,’ ramping up concerns over U.S. involvement and a rapid escalation in the Iran-Israel conflict.

But White House officials clarified that the U.S. was not getting directly involved in the conflict, and was maintaining defensive positions in the Middle East.

Oil soared as much as 2% after Trump’s comments, but then sharply pared gains.

The conflict, which was now in its fifth straight day, showed little sign of deescalating, with Iran launching barrages of missiles against Israel after the country attacked Tehran’s nuclear facilities.

"The market remains on edge with the biggest fear a potential blockage of the Strait of Hormuz, which would lead prices to soar further. Almost a third of global seaborne oil trade moves through the Strait of Hormuz. So far, oil-exporting infrastructure has been avoided and there has been no blockage of the Strait of Hormuz," said analysts at ING, in a note.

Weak data weighs on oil

Oil was also pressured by mixed economic readings from top oil importer China, which presented mixed cues on the world’s second-largest economy. China’s industrial production grew less than expected in May, while retail sales beat expectations.

While oil has advanced on fears of potential supply disruptions in the Middle East, it has struggled to maintain gains amid persistent concerns over slowing demand, especially amid trade hostilities between the U.S. and China.

U.S. retail sales are set to highlight the economic calendar on Tuesday, with investors keen to see if Trump’s trade agenda is denting consumer demand.

Economists expect retail sales to decline by 0.5% month-over-month in May, following growth of 0.1% in April.

Despite ongoing anxiety over Trump’s aggressive tariffs, U.S. consumer sentiment improved for the first time in six months in June thanks to hopes for a trade détente between the U.S. and China, a survey from the University of Michigan showed last week.

Ambar Warrick contributed to this article