Oil prices fell today after Iran and six global powers reached a landmark nuclear deal that would see an easing of sanctions against Tehran and a gradual increase in its oil exports.
Earlier heavy losses were trimmed as traders digested initial news of the deal, with the expected rise in global crude supply already priced in over recent weeks.
The agreement, which capped more than a decade of on-off talks, was hailed by US President Barack Obama as an opportunity worth seizing while Iranian President Hassan Rouhani said it marked a new phase in international relations.
Under the deal, sanctions imposed by the US, European Union and United Nations would be lifted in exchange for curbs on Iran's nuclear programme.
There were no immediate details on how sanctions would be eased on oil.
Brent crude futures were 35 cents lower at $57.50 a barrel this afternoon, off an earlier low of $56.43 a barrel.
US crude was trading down eight cents at $52.12 per barrel after declining earlier to $50.38.
Analysts said that a lot of people had expected the deal and ffter an initial move the market reached an equilibrium as a lot was already priced in.
The weakening dollar - which makes commodities more attractive for investors - and easing concerns over a Greek default further supported oil prices, they added.
Oil experts say it would take Iran many months to fully ramp up its export capacity following any easing of sanctions.
But even a modest initial increase would be enough to pull international oil prices down further as the market is already producing around 2.5 million barrels per day above demand.
"Even with a historic deal, oil from Iran will take time to return, and will not be before next year, most likely the second half of 2016," Amrita Sen, chief oil analyst at London-based consultancy Energy Aspects, told Reuters.
"But given how oversupplied the market is with Saudi output at record highs, the mere prospect of new oil will be bearish for sentiment," the analyst added.
Sanctions on the Islamic Republic have almost halved its exports to a little over 1 million barrels per day.
A deal could see Iran increase its oil exports by up to 60% within a year, a Reuters survey of analysts said.
A rise in Iranian crude exports could put further pressure on the market.
Several of the world's biggest oil companies have held talks with Iranian officials in Tehran in recent months to discuss cooperation following the easing of sanctions.
Royal Dutch Shell said today it was interested in doing business in Iran.