The price of oil will come under "serious downward pressure" as the nuclear deal between Iran and six world powers kicks in next week, a leading analyst told CNBC.
In an interim deal struck between Iran and the UN Security Council plus Germany in November, Iran agreed to freeze parts of its nuclear program in return for sanctions relief. Despite criticism of the move, the deal comes into effect on January 20 giving the parties six more months to finalise the pact.
If negotiations to finalise the deal go well, U.S. and European restrictions on Iran's energy sector could be lifted. Because of the sanctions, western energy companies were prevented from dealing with Iran, causing its oil exports to drop by more than half from 2.5 million barrels per day (bpd) to around 1 million bpd.