Citi Boosts Brent Outlook Amid Ongoing Geopolitical Tensions

Citi has revised its Brent crude price forecast upward, now predicting $80 per barrel in the third quarter. This is an increase from their previous estimate of $75. The bank attributes this change to the prolonged U.S.-Iran war and ongoing disruptions to oil flows through the Strait of Hormuz.

The conflict, which has dragged on for five months, has kept more geopolitical risk in crude prices than Citi initially anticipated. Despite expectations that the situation would be resolved soon, Brent futures are currently trading at $83.11 per barrel.

Citi's fourth-quarter forecast remains unchanged at $70 per barrel, and they still expect the benchmark to average $65 by 2027. However, this prediction is at odds with Goldman Sachs' more bullish outlook, which suggests that Brent prices may remain between $80 and $90 until markets receive confirmation of a U.S.-Iran agreement or a significant escalation in attacks.