Citigroup: Raises Brent Crude Oil Price Forecast for the Second to Fourth Quarters.

Citibank has adjusted its forecast for the average price of Brent crude oil for the remaining time of 2026, indicating that if the oil transportation in the Strait of Hormuz continues to be blocked until the end of June, the price of oil may rise to $150 per barrel. Considering that the United States and Iran did not reach a consensus in the second round of peace talks, Citibank has delayed the expected reopening time of the Strait of Hormuz from mid to late April to the end of May; the basic scenario forecasts for the second, third, and fourth quarters of Brent crude oil have been raised to $110, $95, and $80 per barrel respectively, with a probability of 50% that this scenario will occur. Citibank points out that there are still significant differences between the two sides on bottom-line issues, and the risk bias for the bullish short-term forecasts and the second half oil price forecasts tends to be upward. In a bullish scenario with a probability of 30%, Citibank assumes that the interruption of oil transportation in the Strait of Hormuz will continue until the end of June, at a level similar to the current level. In this scenario, the price of Brent crude oil may soar to $150 per barrel, the average prices for the second and third quarters will be close to $130, and then fall to $100 in the fourth quarter. In the super bullish scenario where the Strait of Hormuz remains closed after June, Citibank says that this result will have a serious impact on the proportion of oil spending to global and U.S. economic output. Despite recent supply disruptions, the price of oil has increased less than expected in the past few weeks. Citibank points out that reasons include a significant increase in inventories before the outbreak of conflict, the release of strategic reserves by the International Energy Agency (IEA), and the market's general expectation that this conflict will be resolved soon. In order to bring the proportion of oil spending to GDP back to historical peak levels, the price of oil needs to be significantly higher than current levels: the price of finished oil in the United States needs to be close to $280 per barrel, and the global price needs to be around $220 per barrel, which means the price of Brent crude oil needs to rise to $160 to $180 per barrel.