Citi sees $75–$78 range if 1.1M bpd of Iranian exports are lost
Brent crude prices may remain 15% to 20% above pre-conflict levels if ongoing Iran-Israel hostilities disrupt 1.1 million barrels per day (bpd) of Iranian oil exports, Citibank analysts said Thursday. This would keep prices in the $75 to $78 per barrel range, compared to around $65 in May.
As of midday Thursday, Brent futures were up 1.9% at $78.18 a barrel, while West Texas Intermediate rose 2.3% to $76.86. The upward trend reflects mounting geopolitical risk tied to potential supply disruptions in the Middle East.
JP Morgan warns of $130 oil in extreme scenarios
JP Morgan analysts said that in a worst-case scenario where the Strait of Hormuz is closed, oil could surge to $120–$130 per barrel. This strategic waterway handles a significant portion of global oil shipments, and its closure would severely impact supply chains.
Iran, OPEC’s third-largest oil producer, pumps around 3.3 million bpd. A sustained disruption of 3 million bpd could drive Brent to $90, Citi warned, though it added that such price spikes would likely be brief as efforts to reopen key transit routes would be immediate.
Offsetting factors may limit the spike
Citi also noted that falling Iranian exports and lower Chinese demand may reduce the price impact of future disruptions. Additional output from other OPEC members could further cushion the market.
“Production elsewhere globally may have risen sufficiently to offset the disruption impact, particularly if the production disruption was expected,” Citi said in its note.
Other banks weigh in on premium pricing
Goldman Sachs estimates that current Brent levels include a $10 per barrel geopolitical risk premium. Barclays said prices could reach $85 if Iranian exports are halved and might exceed $100 in a broader regional conflict.
Despite varying projections, all major banks agree that geopolitical volatility will remain a key driver of oil prices through the coming months.