Two major banks have adjusted their Brent crude price forecasts higher as interruptions to Middle East oil flows continue to exert pressure on global markets.
Citi raised its Brent forecast for the third-quarter of 2026 to $86 per barrel. The bank characterized the present circumstances - which include a U.S. blockade of Iran and curtailed transit through the Strait of Hormuz - as unsustainable. Citi said it expects some form of renewed dealmaking or other developments that would allow the strategic waterway to reopen in the fourth quarter.
ANZ also moved its outlook upward, increasing its short-term Brent forecast to $95 per barrel. The bank described the market as entering a delicate adaptation phase, noting that inventories are declining and that further demand destruction will be required to rebuild stocks.
Citi cautioned that, if the Strait of Hormuz were to reopen, the oil market could flip quickly from tightness to surplus. The bank estimates that reopening would leave the market with an excess of roughly 3 million to 4 million barrels per day, compared to about 2 million barrels per day previously.
ANZ provided an assessment of the potential scale of Persian Gulf supply losses in 2026, estimating that the conflict will remove between 2.3 billion and 2.4 billion barrels of supply over the year. The bank further noted that losses are expected to exceed 2 billion barrels by the end of October.
Both banks emphasize how the interaction of constrained flows through key transit points and diminishing inventories is shaping market dynamics. Citi points to a pathway toward normalization if transit is restored later in the year, while ANZ underscores the adjustment already underway as stocks fall and demand-side responses become necessary to reconstitute inventories.
The assessments from Citi and ANZ reflect current market fragility driven by geopolitical disruptions in the Middle East and the resulting effects on global oil balances.
Summary
Citi and ANZ have raised Brent crude price forecasts in response to ongoing disruptions to Middle East supply, including a U.S. blockade of Iran and reduced flows through the Strait of Hormuz. Citi now forecasts $86 per barrel for third-quarter 2026 and expects a possible reopening of the Strait in the fourth quarter, which could create a surplus. ANZ raised its short-term forecast to $95 per barrel and estimates significant Persian Gulf supply losses of 2.3 billion to 2.4 billion barrels in 2026, with losses surpassing 2 billion barrels by the end of October.