Citi Lifts Q3 2026 Brent Crude Forecast to $86 on Strait of Hormuz Blockage

Citigroup on Thursday raised its price forecast for Brent crude oil for the third quarter of 2026 to $86 per barrel, up from its previous estimate of $80. The bank attributed the revision to expectations that a blockage in the critical Strait of Hormuz will persist longer than previously anticipated.

Forecast Details

While raising its near-term projection, Citi maintained its longer-term outlook for the global oil benchmark. The bank's forecasts for the fourth quarter of 2026 and for 2027 remain unchanged at $70 per barrel and $65 per barrel, respectively.

Citi analysts noted that significant economic pressure on Iran, including a sharp currency devaluation and reduced oil revenues, will likely compel the nation to reopen the strait. The bank anticipates a potential for further short-term escalation in the Middle East, but believes this could ultimately spur negotiations, leading to a reopening of the waterway in the fourth quarter of 2026.

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Impact on Natural Gas Markets

In a related move, Citi adjusted its price forecasts for key natural gas benchmarks, reflecting differing regional dynamics:

• U.S. Henry Hub: The Q3 2026 forecast was lowered to $2.90 per million British thermal units (MMBtu), with the bank citing expectations of continued production growth in the United States.
• European TTF: Conversely, forecasts for the European benchmark were raised due to the anticipated disruption of liquefied natural gas (LNG) exports through the Strait of Hormuz. The Q3 2026 forecast was lifted to €60 per megawatt-hour, and the Q4 2026 forecast was increased to €56 per megawatt-hour.