Citi expects Brent crude to fall to $60 a barrel by year-end, betting that the U.S.-Iran truce holds despite occasional flare-ups. The bank told traders to sell into summer price rallies and pointed to recovering flows through the Strait of Hormuz.
Citi analysts expect Brent crude to slide to $60 a barrel by year-end, staking the call on a U.S.-Iran truce that they believe will endure. The bank framed the drop as the base case even if tensions between the two sides periodically resurface.
Why Citi expects the truce to hold
The forecast rests on a memorandum of understanding the U.S. and Iran signed in mid-June, which Citi analysts said will endure despite potential "temporary flare-ups." They attribute that durability to the absence of incentives for either side to break the deal and to the "genuine conflict fatigue" shown by both nations.
The analysts also flagged Lebanon as a possible disruption source, but noted it is increasingly constrained by a broader U.S. preference for de-escalation. On that basis, they projected Brent to range between $60 and $65 a barrel by year-end and advised traders to sell into oil price rallies over the summer.
Hormuz flows recover
Supporting the bearish view, the report cited shipping volumes through the Strait of Hormuz rising to 7 million barrels a day of crude oil, compared with 15 million before the conflict. Citi suggested the real figure is likely higher than official data indicated, because many vessels disable their transponders for security reasons.
Prices, for now, sit above the target. Brent crude traded 0.33% lower at $72.12 per barrel at the time of the report, while WTI crude futures traded 0.28% lower at $68.50 per barrel.
Source: Benzinga
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