Citi keeps $75 Brent base case for Q3 2026

Citi kept a base-case forecast of $75 a barrel for Brent in the third quarter of 2026 and said it expects prices to ease to $70 in the fourth quarter and to $65 through 2027, citing a likely US‑Iran deal as the de‑risking path. The bank said the market has quieted after a spike earlier this week that pushed Brent near $80 before retreating below $73.

Strait of Hormuz reopening

The bank framed its step-down profile as a political not a structural view: if the Strait of Hormuz reopens on a durable basis, the single largest supply risk premium would unwind and backwardation in the curve should flatten, easing pressure on refined product cracks, the bank said. Citi pointed to an atypical transmission channel in its read: the administration's sensitivity to equity and bond volatility creates a political incentive to return to negotiations when markets rout.

Data showed vessel-tracking through the strait has continued at reduced but meaningful volumes even during recent escalation, a pattern the bank said supports a view that physical flows have proved more resilient than headline risk implied. For now the market is trading closer to the calmer scenario than to a blockade outcome.

Monitor price and diplomatic signals into September 30, 2026 — the end of Q3 — when the bank's third-quarter average can be assessed against realized Brent prices.