The bank sees Brent easing to $60–$62 per barrel by summer if Russia-Ukraine and Iran deals materialise
Oil prices could remain supported in the near term as geopolitical tensions and tighter sanctions enforcement keep supply constrained, but potential peace agreements involving Russia and Iran later this year may ultimately push crude prices lower, Citi said in a note on Monday.
Brent crude has rallied from around $60 per barrel to near $70 over the past month, reflecting stricter enforcement of US sanctions on Russian and Iranian oil, as well as other supply disruptions, the bank noted. Brent futures settled 90 cents, or 1.33 per cent, higher at $68.65 a barrel on Monday.
According to Citi, one channel through which the United States may influence energy affordability is through potential peace deals between Russia and Ukraine, as well as de-escalation with Iran. Such developments could increase supply and weigh on prices.
“It is our base case that both the Iran and Russia-Ukraine deals happen by or during the summer of this year, contributing to a decline in prices to $60–62 per barrel Brent and lowering diesel and gasoline cracks by $5–10 dollars,” Citi said.
The European Union last week proposed extending sanctions against Russia to include ports in Georgia and Indonesia that handle Russian oil, marking the first time the bloc would target ports in third countries, according to a proposal reviewed by Reuters.
Citi added that if disruptions to Russian supply keep Brent in a $65–$70 per barrel range in the coming months, OPEC+ could respond by raising output from spare capacity.
Three OPEC+ sources told Reuters the group is leaning toward resuming oil output increases from April, as it prepares for peak summer demand and as prices remain supported by tensions over US-Iran relations.
The bank also noted that China has been purchasing Russian and Iranian crude at discounts to global benchmarks for both consumption and stockpiling. Citi expects this trend to continue in 2026 as long as sanctions related to Russia-Ukraine and Iran remain in place.
Overall, Citi’s outlook suggests that while geopolitical risks may keep oil prices firm in the short term, a diplomatic breakthrough later this year could shift the balance toward lower crude prices.
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