Citi Projects Brent Crude to Average $60 per Barrel in Early 2026

Citi’s 2026 Outlook

Citi has issued a bearish forecast for Brent crude, estimating an average price of **$60 per barrel** during the first quarter of 2026. The bank’s base case for the full year remains at **$62 per barrel**, while its bullish scenario—contingent on significant geopolitical supply disruptions—projects an average of **$75**. In the most adverse projection, Brent could average **$50** across 2026, driven by geopolitical negotiations, reduced Chinese demand, and a potential increase in OPEC+ supply before U.S. midterm elections.

The analysis highlights that OPEC+ might prolong the pause on rolling back production cuts to address the anticipated supply overhang, potentially extending into 2027 to sustain a price floor.

Market Movements and Geopolitical Factors

Following a Bloomberg report that China is likely to maintain elevated oil purchases for stockpiling—an action that could mask a weakening global demand curve—oil benchmarks experienced a brief rally. The U.S. seized a sanctioned tanker off the Venezuelan coast, sparking fears of supply disruption if tensions were to intensify. Venezuela denounced the seizure as “international piracy.”

Despite the uptick, prices later retraced. At the time of writing, Brent traded at **$61.95 per barrel** and West Texas Intermediate at **$58.24 per barrel**. ING commodity analysts noted that the market is moving further into an expected glut, with pressure on prices expected to grow through 2026. Russian oil supply remains a risk factor; while seaborne exports are holding steady, the Urals region faces challenges in finding buyers unless prices decline.

Supply Dynamics and Risks

Citi’s forecast assumes continued growth in OECD inventories, which would exert downward pressure on benchmark prices. The bank’s bearish scenario incorporates several drivers:

• **Geopolitical dealmaking** that could reduce demand or shift supply flows.
• **Lower Chinese purchasing activity**, diminishing a key market for crude.
• **OPEC+ supply expansion** ahead of the U.S. midterm elections, potentially widening the supply‑demand gap.

The potential for OPEC+ to maintain a production cut pause, coupled with a projected supply overhang, may help keep prices from falling further in the near term. However, analysts warn that Russian export volumes—particularly from the Urals—could become a bottleneck if buyers are unwilling to pay current prices.

These dynamics underscore the complexity of forecasting oil prices, especially as shipping and marine fuel markets remain sensitive to changes in crude pricing. Fluctuations in benchmark prices directly influence the cost of high‑sulphur fuel oil (HSFO) and other marine fuels, thereby affecting bunkering decisions and freight rates across global shipping lanes.

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*Note: All figures and scenarios are drawn from Citi’s published outlook and related market commentary. No additional analysis or predictions beyond the source material have been introduced.*