Why an Iran deal could mean lower oil prices

There's a deal oil can flow: Pro

A final accord to curtail Tehran's nuclear ambitions could lead to a glut of Iranian oil hitting an already "oversupplied market," which would serve to pressure prices, oil expert John Kilduff said Tuesday, as negotiators in Vienna face a deadline that's expected to be extended.

Returning to the talks after consultations at home, Iran's chief diplomat insisted Tuesday he has a mandate to finalize a nuclear agreement, despite increased signs of backtracking.

"Right now the happy talks is flowing … that things are looking good for a deal," said Kilduff, founding partner of Again Capital, an alternative investment manager specializing energy and metals.

In recent weeks, Iranian Supreme Leader Ayatollah Ali Khamenei has issued a series of red lines that appear to renege on a framework for a deal, which was agreed to nearly three months ago.

"I think the real deadline is going to be July 9, and it's really going to be an open question whether they meet that deadline or extend further," Karim Sadjadpour, senior associate at the Carnegie Endowment, told CNBC on Monday.

The negotiators from the U.S., Russia, China, France, Britain and Germany hope to reach an accord to curb Iran's nuclear program for a decade in exchange for tens of billions of dollars in relief from international economic sanctions.

"There are 30 million barrels of Iranian oil in floating storage … potentially ready to hit the open market," Kilduff said on CNBC's "Squawk Box" Tuesday. "If there's a deal and that oil can flow, that means an oversupplied market is going to get even more Iranian crude oil very quickly."

U.S. oil prices have been in a "torturous range" in the past few months between about $58 a barrel and $60 a barrel, he said. "This should produce a break below $58 and head us down into the low $50s, I believe if there's a deal announced."

Just like the second half of 2014, crude should come under heavy pressure again this year, he predicted. "We're probably going to break $50 again in the third quarter as we head into the new year."

The crisis in Greece is also serving to dampen oil prices on concerns about whether the debt wrangling might hurt the European economy. "Anything that argues for a lessening of demand in this balance that we're in right now of oversupply only serves to crush prices even lower."

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—The Associated Press and Reuters contributed to this report.