Citi has revised its third‑quarter 2026 Brent crude oil price forecast upward to $86 per barrel, an increase from its prior estimate of $80 per barrel. The adjustment reflects a longer‑than‑expected closure of the Strait of Hormuz, which the bank says is disrupting oil flows. Citi retained its fourth‑quarter 2026 Brent forecast at $70 per barrel and its 2027 Brent outlook at $65 per barrel.
The bank noted that Iran is under pressure to reopen the strait because its economy has been weakened by a sharp currency depreciation and a recent loss of oil revenue. Citi anticipates that a near‑term escalation in the Middle East could spur renewed diplomatic or commercial initiatives that might enable the strait to reopen in the fourth quarter of 2026.
On the natural‑gas side, Citi lowered its third‑quarter U.S. Henry Hub price forecast to $2.9 per million British thermal units, citing expected production growth. Conversely, it raised its European benchmark TTF price forecasts to €60 per megawatt‑hour for the third quarter and €56 per megawatt‑hour for the fourth quarter, reflecting market expectations of continued disruption to liquefied natural‑gas exports through the Hormuz corridor.