Citi Sees Brent Crude Prices Sliding to $65 by 2027 on Strait of Hormuz Reopening

Citi, a leading financial institution, has revised its forecast for Brent crude oil prices. The bank now expects prices to reach $86 per barrel in the third quarter of 2026, up from previous estimates.

However, Citi's longer-term view remains bearish, with forecasts suggesting that prices will slide to $65 per barrel by 2027. This revised outlook is based on expectations that the Strait of Hormuz will reopen, leading to a larger-than-previously-expected surplus in oil markets.

The bank also adjusted its natural gas market forecasts, lowering its estimate for US Henry Hub gas to $2.90 per million British thermal units due to expected continued production growth. In contrast, Citi raised its TTF price forecasts to €60 per megawatt hour for the third quarter of 2026 and €56 per megawatt hour for the fourth quarter.

The divergence in oil and gas market forecasts highlights the complexities of energy markets and the challenges of predicting future prices. The Strait of Hormuz reopening timeline and US gas production data will be key inputs to watch to validate or challenge Citi's revised price path.