Citi forecast sees Brent oil rising to $110-120 soon

Citi raised its short-term forecast for Brent oil, projecting the price to rise to the range of $110 to $120 per barrel in the coming days, amid intensifying supply disruptions caused by conflicts in Oriente Médio. The financial institution updated its base scenario, with a 50% probability, considering flow interruptions that would last between four and six weeks, equivalent to a reduction of 11 to 16 million barrels per day in the global market. Analysts indicate that prices will continue to rise until they reach a level that forces some form of political or strategic intervention to stabilize supply.

The bank highlights that the ongoing conflict directly drives supply restrictions, with already visible impacts on flows through critical routes such as Estreito and Ormuz. The price of Brent has already recorded strong recent highs, surpassing 100 dollars per barrel in recent sessions, reflecting the geopolitical risk premium incorporated into prices. The forecast considers that the market will react to the persistence of tensions, increasing values ​​until an event occurs that promotes relief, such as the end of military operations or coordinated measures to release stocks.

Forecast considers multiple risk scenarios

Citi assigns a 30% probability to the bullish scenario, in which Brent could reach 150 dollars per barrel or up to 200 dollars per barrel in the event of an extreme worsening, such as direct attacks on energy infrastructure or prolonged closure of Estreito from Ormuz. Essas projections take into account the possibility of a significant reduction in regional production and longer-lasting interruptions in shipments.

In the bearish scenario, with a 20% probability, prices would fall to the range of 65 to 70 dollars per barrel by the end of the year. Essa hypothesis depends on a quick agreement that allows the full reopening of export routes and the normalization of flows.

Analysts expect tensions in the Oriente Médio to ease in mid-to-late April, which could limit the duration of the outages and pave the way for a later price correction.

Factors driving the immediate rise

The institution points out that the market will continue to be pressured upwards as long as the interruptions persist, with the Brent recovering quickly in the coming days. The short-term projection reflects the expectation that the conflict will keep buyers cautious and increase the risk premium in futures contracts.

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Citi also set a three-month WTI target of around $104 per barrel, in line with the view of a temporary rally driven by tight supply. Brent contracts are already trading above $103 per barrel amid recent news.

Impact on other commodities

In addition to oil, Citi remains optimistic about aluminum, due to low inventories and the prospect of smelter production cuts in Oriente Médio. Essa reduction could eliminate up to 6% of global supply, putting upward pressure on prices in parallel with energy tensions.

The combination of geopolitical factors and supply constraints reinforces volatility in energy commodity markets.

Long term forecast

In the long-term base scenario, Citi projects a decline in prices from Brent to the range of 70 to 80 dollars per barrel by the end of 2026.

The institution emphasizes that the trajectory depends on the evolution of the conflict and coordinated responses from global producers and consumers.