If the interim deal struck this weekend in Geneva leads to a full lifting of sanctions, it could spark an injection of oil into an already over-supplied global market, many said on Monday.
But while the agreement in its current form is unlikely to have a significant short-term impact on the market, the loosening of sanctions is likely to see Iranian oil shipments increase to China, India, Japan and South Korea.
News of the deal struck in Geneva led to oil prices falling, but the effect was limited.
In London, Brent North Sea crude for delivery in January fell 0.57 percent from Friday's close to USD 109.23 a barrel at 1700 GMT, while New York's main contract fell back three quarters of a percent to USD 94.07, after earlier dropping to USD 93.08.
The accord is "only a first step and does not impact the current sanctions on Iranian oil exports", noted BNP Paribas analyst Harry Tchilinguirian.
But he said a wider lifting of sanctions on Iran's oil production "would certainly allow oil supply conditions to ease, notably for crudes of medium and heavy quality".
However, the analyst noted that "we are still very far from that outcome".
The six-month deal reached by the United States and Western powers and Iran is aimed at buying time to thrash out a fuller agreement.
One effect of the current agreement is that Iranian oil will be more readily available to buyers in Asia, as European insurers will be allowed to insure oil shipments from Iran again.