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Oil prices drop as production hums despite brimming supply Feeding the beast with ever cheaper oil The wreck of the Kulluk

The agreement also was viewed as a possible harbinger of closer cooperation between the United States and Iran against the Islamic State insurgency in Iraq and perhaps of a lessening of regional tensions.

"If the supreme leader accepts the agreement and Iran complies with the requirements of the deal, and if they adopt a framework friendlier to foreign investment, then Iran's long-term future as a global supplier is significant," said David Goldwyn, who was a senior State Department energy official in the first Obama administration. "It could have a major impact on the geopolitics of both Europe and the Middle East."

Oil prices have been bouncing up and down in recent days as news from the nuclear talks alternately raised and diminished hopes of an agreement. Contradictory factors are likely to continue to move oil in a jagged direction in the coming weeks. On the one hand, oil supplies continue to build in the United States and globally. On the other, conflicts in Iraq and Libya threaten to trim their crude exports.

The sanctions on Iran have brought a steady decline in oil and natural gas revenue, to $56 billion in the 2013-2014 fiscal year from about $118 billion in the 2011-2012 fiscal year, according to the International Monetary Fund.

But even before western sanctions, Iranian oil production was in decline from four million barrels a day in late 2007 to 3.5 million barrels a day only four years later. International oil companies, particularly from Europe, Russia and China, have shown an interest in returning to Iran to reinvigorate the oil industry, but it could take years of negotiations and planning for a serious effort to take root. And with oil prices in decline, oil companies are generally cutting back their exploration and production budgets.

"It's going to be very slow for oil companies to go back," said Dragan Vuckovic, president of Mediterranean International, an oil service company that operates in the Middle East. "It will take at least a year. Opening up takes time."

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Iran deal may be slow to affect oil sector