Oil prices dipped early on Tuesday as the market awaited an announcement on a nuclear deal between Iran and six global powers that could see an easing of sanctions against Tehran and a gradual increase of its oil exports.

Sources present at the talks in Vienna, Austria, said that an announcement was likely to be made in the early hours of Tuesday.

Front-month US crude futures were trading at $81.70 per barrel at 0016 GMT, down 50 cents from their last settlement. Front-month Brent crude was down 43 cents at $57.42 a barrel.

"With a nuclear deal imminent, it is clear that Iran is preparing to make up lost ground and re-establish itself as a major supplier," said Sarosh Zaiwalla, a London-based specialist sanctions lawyer.

"Sanctions have crippled Iran's oil production, halving oil exports and severely limiting new development projects. The prospect of them being lifted is creating great excitement within the industry, as foreign trade and investment will allow Iran to make huge efficiencies and drive down the cost of production," he added.

Although analysts say it would take Iran many months before it could fully ramp up its export capacity following a potential easing of sanctions, they say that even a modest initial increase would be enough to pull international oil prices down further as the market is already producing around 2.5 million barrels per day above demand. – TradeArabia News Service