Iran and six world powers have hammered out a comprehensive agreement on Iran’s nuclear programme after over two weeks of gruelling negotiations in Vienna.

Both sides compromised on their negotiating positions as they attempted to overcome a number of sticking points on UN nuclear inspections and the process of lifting sanctions against Iran’s economy.

Under the agreement, the UN will be allowed to monitor military sites but Iran will have the power to challenge requests for access.

Iran appeared to compromise its position on the “snap back” of sanctions should Tehran violate the terms of the agreement. The deal allows economic sanctions to be reintroduced within 65 days by a UN ruling.

Iran also conceded to the continuation of a UN arms embargo and restrictions on ballistic missile technology, which will remain in place for five and eight years, respectively.

The deal largely stuck to the guidelines of the framework agreement reached on 2 April but was fleshed out into a 160-page document signed off by both sides.

Sanctions against oil and gas exports, financial transactions, aviation and shipping will be lifted when the terms of the deal are introduced, while Iran will have access to an estimated $100bn in frozen overseas oil funds.

The full text of the agreement will be the UN in the next few days and the terms will be enshrined in a new resolution backed by the international body.

“This agreement opens new possibilities and a way forward to end a crisis that has lasted for more than 10 years,” said the EU’s foreign policy chief Federica Mogherini, reading the official joint statement.

“We know that this agreement will be subject to intense scrutiny. But what we are announcing today is not only a deal but a good deal. And a good deal for all sides – and the wider international community,” she added.

Iranian Foreign Minister Mohammad Zarif said that the deal was “not perfect for anybody” but “it is is what we could accomplish and it is an important achievement for all of us”.

The terms of the deal will not be introduced for at least another 90 days. Meanwhile, the US Congress will have 60 days to review the agreement and, if it is rejected, the legislative body would be forced to override a presidential veto.

Opposition to the agreement in the US Congress is strongly influenced by the support for Israel, which has strongly opposed any deal on Iran’s nuclear programme.

Israeli President Benjamin Netanyahu was the first world leader to react to the agreement, calling it a “historic mistake” for the world.

Oil markets reacted negatively the agreement with traders anticipating a surge in Iranian crude exports after sanctions are lifted, adding to an already oversupplied market.

The Brent crude price had dropped by 1.8 per cent by midday in London to $56.82 a barrel.

International sanctions against Iran have caused Iranian oil exports to drop significantly ever the last three years but the comprehensive deal will allow Tehran to ramp up production and increase exports, especially into European markets.

Renaissance Capital forecast this week that Iranian oil production will rebound by 750,000 barrels a day (b/d) to 4.4 million b/d in 2016. Together with the 19 million barrels already stored, this could increase Iranian exports to 2.4 million b/d next year from 1.6 million b/d in 2015.

Iran is viewed as the largest global economy cut off from international investors with a population of nearly 80 million and the second largest GDP in the Middle East. The lifting of sanctions could see significant investment the Iranian oil and gas industry along with several other sectors.

“While this news brings reason to celebrate, developers are well advised to temper enthusiasm until the complex web of sanctions are fully unwound over the coming months,” said George Booth, oil and gas partner at law firm Pinsent Masons.

“Snap-back provisions which essentially give the P5+1 the power to push the reset button should they regard Iran to be reneging on aspects of the final deal should be considered as they could leave developers exposed to sanctions suddenly leading to costly fines and severe penalties,” he added.

Iranian investment group Turquoise Partners likened the growth potential of Iran as a sleeping giant about to wake up.

“With this deal in place and subsequent removal of sanctions, Iran could turn into an engine of economic growth for the whole region,” said Ramin Rabi, CEO at Tehran brokerage Turquoise Partners.