Oil prices drop on Iran deal

London

Oil prices fell today as Iran's deal with world powers aimed at ensuring Tehran does not obtain a nuclear bomb was set to see crude added to an already oversupplied market.

Analysts said the landmark agreement that will see sanctions lifted on Iran's oil exports would put a lid on any rise in crude futures this year and in the future.

On Tuesday, Brent North Sea crude for delivery in August shed 75 cents to stand at $57.10 a barrel in London afternoon deals.

US benchmark West Texas Intermediate for August dropped $1.05 to $51.15 compared with Monday's close.

"To be clear, the return of Iranian oil exports over the next year is one factor likely to keep oil prices low," said Thomas Pugh, commodities economist at consultants Capital Economics.

"However, oil prices will also continue to be buffeted by changes in sentiment towards commodities in general, which have recently been influenced most by the gyrations in China's stock market," he added.

The nuclear accord is aimed at ending a 13-year standoff over Iran's nuclear ambitions after repeated diplomatic failures and threats of military action.

The deal puts strict limits on Iran's nuclear activities for at least a decade and calls for stringent UN oversight, with world powers hoping that this will make any dash to make an atomic bomb virtually impossible.