Hi,
If this cyst has become infected and has grown in size you should have it looked at by a doctor. Don't peel, squeeze, or try to drain it because that can cause damage to the skin that is trying to heal, and an infection can occur...
You may have a burn, or an allergic reaction, to the Tea Tree Oil; stop using it for now... To help heal the affected area, you can either apply a thin layer of Aloe Vera (gel, juice, or ointment) 3x daily, or apply a thin layer of Neosporin once daily. You should cover the area with a nonstick, sterile pad (gauze or Telfa pads), secured with first-aid tape to help keep it clean ~ change the pad once daily, or whenever it becomes damp or messy. You should see healing within a week, but if you don't, you should see a doctor for further treatment. Good Luck