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 / Updated  / Source: Reuters
By Reuters

SINGAPORE — Oil prices tumbled more than a dollar on Tuesday as Iran and six global powers reached a nuclear deal that could see an easing of sanctions against Tehran and a gradual increase in its oil exports.

Front-month Brent crude futures dropped over 2 percent and more than a dollar to $56.66 a barrel by 2:37 a.m. ET. U.S. crude was trading down $1.21 at $50.99 per barrel.

"Sanctions have crippled Iran's oil production, halving oil exports and severely limiting new development projects," said Sarosh Zaiwalla, a London-based sanctions lawyer. "The prospect of them being lifted is creating great excitement ... as foreign trade and investment will allow Iran to make huge efficiencies and drive down the cost of production."

Yet analysts 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.