German companies are hoping to win billions of euros worth of business from Iran after world powers reached a preliminary nuclear accord with Tehran, and Germany's engineering body urged banks to revise their business policies towards Iran.

The tentative agreement struck on Thursday opens the way for a settlement to allay Western fears that Iran could build an atomic bomb, with economic sanctions on Tehran being lifted in return. But difficult details still need to be worked out before a self-imposed June deadline.

"German businesses see the agreement as an encouraging sign," Felix Neugart, a foreign trade expert at Germany's DIHK Chambers of Commerce and Industry, told Reuters.

If economic sanctions were lifted by mid-year, business with Iran could "pick up markedly" in the second half of 2015, Neugart said. He added that German exports to Iran could double in the next five years.

In 2014, the value of German shipments to Iran rose by almost 30 per cent to 2.4 billion euros ($2.6 billion) after some sanctions were suspended.

"In the long-term, trade could definitely be in the double-digit billions," Neugart said.

Neugart said interest in German machines and facilities remained high. Prospects were also good for the auto, chemical, pharmaceutical, medical device and renewable energy, he said.

Germany's VDMA engineering association welcomed the deal, saying that as long as negotiators agreed on the remaining details, it would be a strong foundation for future relations with Iran, including economic ties.

The VDMA said while embargoes would remain unchanged from a legal perspective for German machine manufacturers until the final agreement, Iranian demand for machinery was likely to rise, because such projects often have a long lead time. Deman for spare parts for machines will also increase, the VDMA said.

Ulrich Ackermann, head of the VDMA's foreign trade department, said the VDMA was urging banks to revise their policies on business with Iran now rather than in late summer.

"Because when Iranian customers enquire about new investment projects soon, you can't simply put them off until autumn due to deliveries of spare parts that are urgently needed," he said.

The VDMA said exports of German machines and facilities to Iran fell to 455 million euros in 2013 from 1.57 billion euros in 2006, though they picked up to 631 million euros last year.

Michael Fuchs, a senior member of German Chancellor Angela Merkel's Christian Democrats, said an agreement could be "very advantageous" for both Germany and Iran, the newspaper Frankfurter Allgemeine Zeitung reported.

He said existing sanctions should be "relaxed within the framework of a strictly monitored agreement as soon as possible".

The United States, the European Union and the United Nations have all imposed sanctions against Iran out of concern about Iran's nuclear activities. – Reuters