Key facts
- Citi raised its Q3 2026 Brent crude forecast to $80/bbl.
- Citi maintained Q4 2026 and full-year 2027 Brent forecasts at $70/bbl and $65/bbl.
- Oil prices rose due to U.S. job losses and ongoing U.S.-Iran peace talks.
- Brent crude futures traded at $81.79/bbl and WTI at $78.32/bbl.
- Citi's bull-case scenario predicts Brent could spike to $150/bbl if Strait of Hormuz disruptions persist through June.
Citi has revised its third-quarter 2026 average Brent crude forecast upward to $80 a barrel from $75, citing the prolonged negotiations between the U.S. and Iran. The bank maintained its forecasts for the fourth quarter of 2026 at $70 a barrel and for the full year 2027 at $65 a barrel.
Oil prices saw an increase, influenced by U.S. job loss data and ongoing concerns over the peace talks between Iran and the U.S. aimed at resolving a five-month conflict. Brent crude futures were trading at $81.79 a barrel, a 1.4% increase, while U.S. West Texas Intermediate futures rose 1.33% to $78.32.
Earlier, Goldman Sachs projected that Brent crude would likely stay within the $80 to $90 a barrel range until either a new U.S.-Iran nuclear deal is confirmed or there is a significant escalation in attacks.
In a separate analysis, Citi had previously raised its outlook for average Brent crude prices for the remainder of 2026, warning of a potential surge to $150 a barrel if oil flows through the Strait of Hormuz are disrupted until the end of June. The bank had set its base-case forecast for Brent at $110, $95, and $80 a barrel for the second, third, and fourth quarters of 2026, respectively, with a 50% probability. Citi also adjusted its expected reopening of the Strait of Hormuz to the end of May, following the failure of the second round of peace talks between the U.S. and Iran to yield an agreement. Citi noted that oil prices have not risen as much as anticipated recently, despite supply disruptions, attributing this to substantial pre-conflict inventory builds, releases from strategic reserves, and widespread expectations of a swift conflict resolution.