Citi revises Q3 2026 Brent forecast to $86/bbl

Citi on Thursday said it raised its mark-to-market Brent average forecast for the third quarter of 2026 to $86 a barrel from $80 a barrel previously, citing a longer-than-expected timeframe for the reopening of the Strait of Hormuz.

Citi said it is maintaining its fourth quarter 2026 and 2027 Brent average forecasts at $70 per barrel and $65 per barrel respectively.

"We believe that Iran is incentivized to try to break the blockade sooner rather than later, with its economy suffering from a dramatic decline in its currency and lost oil revenues in recent weeks," Citi said.

The bank said it expects a near-term escalation in the Middle East that ultimately leads to another major push for dealmaking, or that other factors evolve in a way that allows the Strait to reopen in the fourth quarter of 2026.

Citi also lowered its third-quarter U.S. Henry Hub natural gas price forecast to $2.9 per million British thermal units on expectation of production growth. It raised its European benchmark TTF prices to €60/MWh for the third quarter and €56/MWh for the fourth quarter as the market continues to expect the strait to be severely disrupted for LNG exports.