By Jonathan Davies

Oil prices fell more than $1 after a landmark deal was reached with Iran to limit its nuclear activity in return for the lifting of economic sanctions.

News of the deal, which has been negotiated for nine years, resulted in a $1.15 drop in the cost of Brent crude oil. It now stands at $56.70. US crude oil fell $1.05 to $51.15.

It is thought that reduced economic sanctions on Iran will see it increase oil production dramatically, contributing to and already overflowing global supply.

According to oil industry experts, Iran could increase its production by up to 60% in the next year.

Sarosh Zaiwalla, a lawyer specialising in sanctions, said: "Sanctions have crippled Iran's oil production, halving oil exports and severely limiting new development projects.

"Foreign trade and investment will allow Iran to make huge efficiencies and drive down the cost of production."