Key Highlights
- Citigroup increased its near-term Brent crude projection to $120/barrel from a previous $95 estimate
- Goldman Sachs adjusted its fourth-quarter Brent forecast to $90/barrel, representing an increase of nearly $30 since pre-crisis levels
- Persian Gulf crude transits through the Strait of Hormuz have dropped to virtually nothing
- Cumulative supply losses have reached approximately 500 million barrels since hostilities commenced
- Brent crude prices have climbed nearly 50% from levels seen in late February when the conflict erupted
Major financial institutions including Citigroup and Goldman Sachs have adjusted their crude oil price projections upward as the blockade of the Strait of Hormuz continues without resolution. On Monday, Brent crude was changing hands near $108.50 per barrel, climbing approximately 3% during the session while extending its winning streak to six consecutive trading days.
Citigroup’s revised forecast places Brent at $120 per barrel within a zero to three-month timeframe. The financial institution updated its average quarterly projections to $110, $95, and $80 for the second, third, and fourth quarters of 2026 respectively. Previous estimates stood at $95, $80, and $75 for the same periods.
The bank assigns a 50% likelihood to its baseline projection. This outlook anticipates the Strait will begin reopening toward the end of May, representing a one-month delay from Citi’s earlier expectations.
Citigroup analysts highlighted that Tehran possesses both economic and geopolitical incentives to maintain the current closure of the waterway. They noted this strategy would constrict worldwide petroleum availability, accelerate the depletion of stored reserves, and drive market prices upward.
According to Citi’s calculations, approximately 500 million barrels of cumulative output have been removed from markets since the onset of the conflict. Should the Strait remain inaccessible through the end of May, the institution forecasts aggregate losses could climb to 1.3 billion barrels.
Goldman Sachs Revises Projections Upward
Goldman Sachs similarly adjusted its oil price expectations on April 27. The investment bank currently anticipates Brent will average $90 per barrel during the fourth quarter of 2026, revised upward from an earlier $80 projection. Goldman notes this figure represents an increase of approximately $30 compared to levels forecast before what market observers are terming the “Hormuz shock.”
Goldman’s analysis indicates that production losses of 14.5 million barrels daily from Persian Gulf operations are causing worldwide inventories to decline at an unprecedented rate of 11 to 12 million barrels per day throughout April. The firm forecasts a supply deficit of 9.6 million barrels daily for the current quarter. Goldman’s updated outlook places Brent at $100 for the present quarter and $93 during the third quarter.
Morgan Stanley Maintains Current Position
Morgan Stanley opted to keep its existing forecasts in place. The institution anticipates Brent will average $110 during the current quarter, $100 in the third quarter, and $90 in the fourth quarter. Morgan Stanley calculates that Gulf region petroleum exports have declined by 14.2 million barrels daily as a result of the waterway closure.
The financial institution stated that global petroleum reserves have decreased by an estimated 4.8 million barrels per day, with reduced consumption patterns explaining a portion of the differential.
Under Citi’s optimistic scenario, which the bank views as having a 30% probability, Brent could reach $150 per barrel should disruptions persist through the conclusion of June. An extreme scenario involving damage to critical infrastructure could propel prices into the $160–$180 per barrel range on a sustained basis.
Worldwide petroleum inventories are projected to fall to their most depleted levels in more than ten years by the end of July under Citigroup’s baseline scenario.
