Citi raises Q3 2026 Brent crude oil forecast to $80 a barrel

Citi bumped its Q3 Brent crude outlook up to $80 a barrel from $75 on Friday, with analysts pointing to the slow-moving U.S.-Iran negotiations as the key driver, according to Reuters. The bank expressed continued confidence that a deal will eventually be reached, but said the delay has warranted a higher near-term price assumption.

For the fourth quarter of 2026 and the full year 2027, Citi left its average Brent price targets in place at $70 and $65 a barrel.

By late Friday afternoon, Brent crude had gained $1.18, or about 1.4%, to trade at $81.79 a barrel, while WTI was up $1.03, or 1.33%, at $78.32. Weak U.S. employment data and persistent anxiety over the stalled Iran-U.S. talks — now approaching the five-month mark — were among the factors supporting prices.

Goldman Sachs, earlier in the week, told clients it sees Brent holding between $80 and $90 a barrel absent a clear catalyst — either a confirmed nuclear agreement with Iran or a marked intensification of hostilities, according to Reuters.

The diplomatic situation has swung back and forth in recent weeks. As President Donald Trump called off planned strikes on Iran and signaled a return to diplomacy at the start of August, Brent tumbled roughly 6% to $82.95 a barrel on the first trading day of the month. Vital Knowledge founder Adam Crisafulli cautioned at the time that investors were keeping their enthusiasm in check, noting that the conflict likely had further to go before reaching a resolution, according to CNBC.

The conflict's effect on global oil markets has been severe. The International Energy Agency has characterized the disruption as the worst oil supply crisis on record, and global oil demand is on track to fall by one million barrels per day this year as war in the Middle East restricts flows from the region — the first annual demand contraction since the COVID-19 pandemic. The Strait of Hormuz, a chokepoint carrying roughly a fifth of world oil and gas supplies, has seen commerce come nearly to a standstill during the most acute phases of the fighting.

According to IEA projections, output is expected to decline by 3.7 million barrels per day on an annual basis, then rebound by 7.5 million barrels per day in 2027 — though the agency has warned that the path back will be gradual and uneven, given the depth of uncertainty surrounding the conflict.