Crude oil futures declined after Iran and world powers said they reached an outline accord that keeps them on track to end a decade-long nuclear dispute.

Brent slid 3.8% in London, while West Texas Intermediate crude dropped 1.9% in New York. The sides now have until the end of June to bridge gaps and draft a detailed technical agreement that would ease the international sanctions imposed on Iran, including oil exports. Prices pared losses on speculation no additional Iranian oil will flow into the global market in the short term.

“This is mildly bearish,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. “We were expecting more Iranian oil to hit the market regardless of the outcome of the talks. They are not about to dump oil on the market.”

Iran, a member of OPEC, could boost shipments by 1 million barrels a day (MMbbl/d) if penalties are lifted, Oil Minister Bijan Namdar Zanganeh said March 16. Extra supplies would add to a worldwide glut that’s sent oil prices 50% lower since last year.

WTI for May delivery settled down 95 cents to end at $49.14 a barrel on the New York Mercantile Exchange. The contract climbed $2.49 to $50.09 on Wednesday, the biggest gain since February.

Iran Output

Brent for May settlement declined $2.15 to $54.95 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.81 to WTI on the ICE.

Both exchanges are closed April 3 for the Good Friday holiday.

Sanctions against oil exports will be lifted upon the deal’s completion, Iran’s Tasnim news service reported.

Iran pumped 2.85 MMbbl/d of crude in March, the most in a year, according a Bloomberg survey of oil companies, producers and analysts. Output was as high as 3.83 million in 2010.

The country exports about 1 million to 1.1 MMbbl of crude per day, down from 2.5 million before the U.S. and European Union added oil sanctions in mid-2012, data from the International Energy Agency show.

“If they are going to lift the oil sanction, that would be definitely bearish,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “But the devil is in the detail. We’ll have to wait and see what really happens.”

Oil prices have fallen as the global supply glut was exacerbated by rising production in the U.S. and OPEC’s refusal to curb supplies at its November meeting.

Crude Stockpiles

U.S. crude inventories rose by 4.77 MMbbl to 471.4 million last week, the Energy Information Administration, the Energy Department’s statistical arm, reported Wednesday.

Iraq, OPEC’s second-largest producer, shipped 92.4 MMbbl in March, or 2.98 MMbbl/d, Oil Ministry spokesman Asim Jihad said by phone from Baghdad. Iraqi exports gained 15% from February, when foul weather at the country’s southern oil terminals limited shipments to 2.59 MMbbl/d, according to the Oil Ministry.

U.S. output shrank by 36,000 bbl/d in the week to March 27, the EIA said. Production fell from 9.42 MMbbl/d the previous week, the highest in weekly records compiled by the EIA dating back to January 1983.