Citigroup has raised its forecast for Brent crude in the third quarter to $80 per barrel from $75, as the prolonged US-Iran conflict continues to disrupt oil supplies and efforts to restore normal shipping through the Strait of Hormuz remain unsuccessful.
Despite the upward revision, the bank maintained its bearish medium-term outlook, leaving its fourth-quarter Brent projection at $70 per barrel and forecasting an average price of $65 per barrel in 2027.
Brent crude was trading at $83.11 per barrel at the weekend, gaining 62 cents, while West Texas Intermediate (WTI) rose 51 cents to $77.80. Oil prices received fresh support from renewed uncertainty surrounding negotiations between Washington and Tehran, after Brent had slipped below $80 earlier in the week on expectations of a possible agreement over Hormuz.
The latest forecast represented a significant adjustment to Citi’s earlier position. In July, the bank had advised investors to sell into summer rallies, projecting that Brent could decline to between $60 and $65 a barrel by year-end as oil flows through the strategic waterway recovered and the United States and Iran moved towards a wider agreement.
However, the conflict has persisted for five months, with shipping through Hormuz still severely restricted. Middle Eastern oil output also remains below pre-war levels, while attacks on commercial vessels have continued despite diplomatic efforts to reach an arrangement.