Oil Prices May Settle Lower Over Possible Iran, Russia And US Resolution — Citi
By Naija Enquirer Staff
Global financial institution, Citi, has warned that crude oil prices could ultimately trend lower later this year, even though prices may remain supported in the short term due to rising geopolitical pressure linked to Russia and Iran.
The bank noted that Brent crude has rallied from around $60 per barrel to nearly $70 per barrel over the past month, driven by tighter enforcement of U.S. sanctions on Russian and Iranian oil, alongside other supply disruptions.
Sanctions Pressure Continues To Tighten
Citi’s outlook comes amid renewed sanction measures targeting Russia’s oil export routes.
Last week, the European Union (EU) proposed expanding its sanctions against Russia to include ports located in Georgia and Indonesia that handle Russian oil. According to a proposal document reviewed by Reuters, this would mark the first time the EU is extending sanctions to ports in third countries involved in Russian oil trade.
Citi Sees Summer Peace Deals As Key Price Trigger
According to Citi, one major pathway for lower oil prices could come through U.S.-backed diplomatic outcomes, including peace agreements between Russia and Ukraine, as well as possible de-escalation with Iran.
The bank stated that such developments could increase oil supply availability and improve global affordability of crude and refined products.
“It is our base case that both Iran and Russia-Ukraine deals happen by or during the summer of this year, contributing to a decline in prices to $60-62/bbl Brent and lowering diesel and gasoline cracks by $5-10 dollars,” Citi said.
OPEC+ May Increase Output If Prices Hold Strong
Citi also noted that if Russian supply disruptions continue to support Brent crude in the $65–$70 per barrel range over the coming months, OPEC+ could respond by raising production from its spare capacity.
This view aligns with reports that OPEC+ is already leaning toward restarting output increases from April, according to three OPEC+ sources. The group is reportedly preparing for peak summer demand, while oil prices remain firm amid ongoing tensions surrounding U.S.-Iran relations.
China Likely To Keep Buying Discounted Oil
Citi further observed that China has continued purchasing Russian and Iranian crude at discounts to global benchmarks, not only for consumption but also for strategic stockpiling.
The bank expects this trend to continue through 2026, as long as sanctions on Russia and Iran remain in place.
With geopolitical developments now shaping supply expectations, Citi believes crude markets may remain volatile in the near term, but could ease significantly if diplomatic breakthroughs emerge by mid-year.
