Citi expects oil prices to rise sharply in the near term as supply disruptions driven by geopolitical tensions intensify. In a note released on Wednesday, the bank projected that Brent crude could climb to between $110 and $120 per barrel in the coming days.
The report, led by Maximilian Layton, Citi’s head of global commodities, outlines a revised base-case scenario with a 50% probability. This scenario assumes that oil supply disruptions could last between four and six weeks, potentially affecting 11 to 16 million barrels per day.
According to Citi, Brent prices are likely to continue rising as the conflict unfolds, potentially reaching the $110–$120 range. The bank believes the market will keep moving higher until prices trigger a form of political or strategic intervention.
Such a turning point could include actions like the United States ending its military operations, coordinated inventory releases from the International Energy Agency (IEA) and OECD countries, or global powers stepping in to reopen the Strait of Hormuz.
Citi also highlighted significant upside risks. In its bullish scenario, which carries a 30% probability, Brent prices could surge to $150 per barrel and potentially reach as high as $200 if the conflict escalates further. This could occur if Iran targets broader energy infrastructure or if the Strait of Hormuz remains effectively closed through June.
On the downside, Citi assigns a 20% probability to a bearish scenario in which oil prices fall back to $65–$70 per barrel by the end of the year. However, this outcome would likely require a swift agreement between the United States and Iran that leads to the reopening of key shipping routes.
Beyond oil, Citi also expressed a strong bullish outlook on aluminium. The bank pointed to low global inventories and the risk of production cuts in the Middle East, which could remove up to 6% of global supply and further support prices.
