The departure of Rex Tillerson as the top U.S. diplomat could end the Iranian nuclear deal and send oil prices sharply higher as a result, analysis finds.

U.S. President Donald Trump unceremoniously dumped Tillerson using a statement Tuesday on Twitter. Tillerson, the former head of Exxon Mobil, was among the voices encouraging Trump to stick with an agreement that gives Iran relief from sanctions pressure in exchange for commitments to draw down its nuclear research program.

The Trump administration, paradoxically, is looking to build up its diplomatic corps for possible nuclear détente with North Korea.

Mike Pompeo, the head of the Central Intelligence Agency who has been tapped to fill Tillerson's shoes, has long been an opponent of the Iranian nuclear agreement, which counts the five permanent members of the U.N. Security Council and Germany among its signatories. With Tillerson out, and Pompeo in, Joe McMonigle, a senior energy analyst at Hedgeye Risk Management, said the nuclear deal is likely over.

"In our view, it is unlikely that Congress or the Europeans will take any meaningful action to modify the agreement," he said in emailed comments. "As a result, there is significant risk of snap-back U.S. oil sanctions on Iran on May 12, and the nuclear deal remains on life support."

The sanctions on Iranian oil exports in the European market would come at a time when traders are watching a shrinking gap between supply and demand. When the balance was tilted heavily toward the supply side two years ago, markets had a lot of breathing room for unrest. With the gap indicating a market in near balance, there's no room for geopolitical risk.

Trump opted to extend waivers to Iran in January. He must regularly weigh in on sanctions, and not extending them would've pulled the estimated 1 million barrels of Iranian oil flowing in the global market.

Giovanni Staunovo, a commodity analyst for UBS, told UPI that long-term market factors may depend on what European and Asian importers of Iranian oil do and how the Organization of Petroleum Exporting Countries reacts to a handicap on one of their top producers.

"While a U.S. walk away from the nuclear deal is bullish for oil prices at first sight, the impact on oil prices will depend on how many Iranian barrels are removed by the potential sanctions," he said.

The start of 2018 saw political demonstrations break out in Iran over rising prices in an economy where inflation is close to 10 percent. Oil prices are now about $6 per barrel below their peak levels above $70 this year.

Trump's stance on major oil producers was questioned in the past. The administration last year considered tightening sanctions on Venezuela, where energy represents about 95 percent of its export economy. That move would've created U.S. problems as well because, for the refiners concentrated on the U.S. Gulf Coast, Venezuela is the largest source of crude oil, ahead of Saudi Arabia.

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