Citigroup: Oil prices are expected to reach $75-78 per barrel
author: Ann
2025-06-23
"This implies Brent prices should be between $75 and $78 a barrel," Citigroup said in a report. In May, oil prices have been hovering around $65 a barrel.
As of 12:30 EST on Thursday, Brent crude futures rose $1.48, or 1.9%, to $78.18 a barrel, while U.S. West Texas Intermediate July futures rose $1.72, or 2.3%, to $76.86 a barrel.
Separately, JPMorgan Chase said in a report that in the most extreme scenario of a wider regional conflict, including the closure of the Strait of Hormuz, it expects oil prices could surge to $120 to $130 a barrel.
Crude oil prices rose as traders reacted to growing geopolitical risks as the conflict between Iran and Israel raised concerns about possible oil supply disruptions in the key oil-producing Middle East.
Iran is OPEC's third-largest producer, producing about 3.3 million barrels per day of crude oil.
A supply disruption of about 3 million barrels per day for several months could push oil prices to $90 a barrel, according to Citi.
Any closure of the Strait of Hormuz could lead to a sharp rise in prices, but Citi believes the impact would be short-lived as efforts would be focused on reopening it quickly.
The report said that the impact of a disruption in Iranian oil exports on oil prices could be smaller than expected due to lower exports and reduced Chinese purchases at currently higher oil prices.
"Production elsewhere in the world may have grown significantly enough to offset the impact of a production disruption, especially if the production disruption was expected," Citi noted.
The report also said that increased supply from the Organization of the Petroleum Exporting Countries (OPEC) could also mitigate the impact of a disruption in Iranian oil exports.
Goldman Sachs noted on Wednesday that it estimates the geopolitical risk premium will be around $10 a barrel as Brent crude prices rise to $76-77 a barrel, while Barclays said crude could rise to $85 a barrel if Iranian exports were cut in half and could top $100 a barrel in a "worst case scenario" of a wider conflict.
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