Citi Raises Brent Forecast on Prolonged Strait of Hormuz Closure

Citi raised its third-quarter Brent crude oil price forecast to $86 per barrel from $80 on Thursday, attributing the revision to a longer-than-expected closure of the Strait of Hormuz.

The bank expects Iran's economy to be hurt by a sharp currency decline and lost oil revenue in recent weeks, leading to pressure for the strait to reopen. Citi anticipates a near-term escalation in the Middle East that could lead to renewed dealmaking efforts or other developments allowing the Strait of Hormuz to reopen in the fourth quarter of 2026.

The bank also adjusted its third-quarter U.S. Henry Hub natural gas price forecast lower to $2.9 per million British thermal units, citing expected production growth. Meanwhile, Citi raised its European benchmark TTF price forecasts for both the third and fourth quarters due to continued disruption in liquefied natural gas exports.