The deal lasts for six months, during which time the two sides will seek a permanent settlement. The consequences for global energy will be huge if the negotiations eventually lead to an end of international sanctions, including the European Union's ban on purchases of Iranian oil.
"If Iran really gets back to producing its oil and expanding capacity, the potential is almost as big as the shale gas revolution in the United States," said Phil Flynn, senior energy analyst for the Price Futures Group.
Iran holds the world's fourth-largest proven oil reserves and second-largest natural gas reserves, according to the International Energy Agency. Iranian oil exports have plummeted by 60 percent in the past two years as a result of the international sanctions. The sanctions have crippled Iran's economy, which relies on crude oil sales for 80 percent of its export earnings.
Flynn said there was a long way to go before the West would trust Iran. But any long-term easing of restrictions on Iranian crude could significantly lower the global oil price. Oil prices dropped Monday after news of the deal to curb Iran's nuclear program raised the prospect of future Iranian exports.
Energy analyst Stephen Schork said he was skeptical. The price drop was a knee-jerk market reaction to the interim deal, he said, and in the longer term, he doubts the negotiations will lead to a permanent agreement.
"I can't imagine the Iranians will actually meet the kind of terms that would lead to a complete lifting of the ban," Schork said.
The head of the International Energy Agency said Monday in Moscow that it would be difficult for Iran to quickly ramp up to previous levels even if the sanctions were dropped.
But Iran at least bought some breathing room with the deal announced over the weekend. While Europe's ban on Iranian crude remains in place, the agreement gives Iran a chance for more exports to Asia.
That's because it lifts a European Union ban on insuring tankers that carry Iranian crude oil, analysts said. The restriction was particularly a problem for Iran's exports to India, said Kevin Book of ClearView Energy Partners. He said the result could be a boost in Iranian exports of up to 400,000 barrels a day.
Flynn, of the Price Futures Group, agreed that removing the insurance ban is significant.
"It will allow the Iranians to charge a higher price to their customers, and it will allow these buyers to purchase more," Flynn said.
But Goldman Sachs analysts downplayed the impact in a research note Monday, pointing out that the White House says Iran's crude sales aren't supposed to rise under the interim deal. The United States has the ability to pressure other nations to limit how much Iranian crude they buy.
"We therefore believe that the volume of Iranian crude oil available to the international market will largely remain unchanged over at least the next six months," Goldman Sachs said in its note to clients.
That would still be positive for Iran, though, since at least its exports wouldn't continue to slide.
The U.S. has pressured other nations to cut back their purchases of Iranian oil. The White House is dropping that position as a result of the deal, instead saying it wants Iran kept to about a million barrels a day in sales.
That was Iran's average the first nine months of this year, and it's 285,000 barrels a day more than Iran exported in October.
It's questionable whether an additional 285,000 barrels a day of oil from Iran would have a noticeable impact on global oil prices. Book, of ClearView Energy Partners, said it was enough to offset the recent drop in Iraqi crude exports. But he and other analysts said it wasn't nearly enough to make up for the hole in the world oil market left by plummeting Libyan production as a result of labor unrest and security concerns there.
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