Citi said in a note on Wednesday that it expects oil prices to climb sharply as conflict-driven supply disruptions intensify, with analysts projecting Brent will rise to between $110 and $120 a barrel in the coming days.
In a note led by Maximilian Layton, the bank’s head of global commodities, stated that its refreshed base case (which is assigned a 50% probability) assumes 4–6 weeks of disrupted flows, amounting to as much as 11–16 million barrels per day.
Citi wrote that “Brent prices will rally as the conflict continues over the coming days, to $110-120/bbl,” arguing the market will keep rising until it hits a level that forces political or strategic intervention.
According to the note, that could be the “price or market event which drives the U.S. to end its military operation,” the point at which the IEA/OECD release inventories more aggressively, or the level that prompts global powers to “forcefully re-open the Strait.”
Citi highlighted that escalation risks remain significant. In its bull case, which carries a 30% probability, Brent could “reach $150/bbl” and rise to as much as $200/bbl ‘all-in’ if Iran attacks broader energy infrastructure or if the Strait of Hormuz remains effectively shut through June.
The bank’s bear case, with just 20 percent probability, sees prices retreating to $65–70 by year-end, but only if a rapid U.S.–Iran deal reopens the Strait.
Beyond crude, Citi is “very bullish on aluminium,” citing low inventories and the prospect of Middle Eastern smelters cutting production, potentially removing up to 6 percent of global supply.
Source: Investing