Citi’s commodity desk projects Brent crude could dip to $60 a barrel by year‑end, well below the $126 peak recorded in late April during the Iran‑Israel clash. The bank’s note cites the mid‑June US‑Iran memorandum of understanding as a key factor limiting supply disruptions. Traders are urged to sell on any summer rallies as the market tilts toward surplus. Such a move would reshape hedging strategies for energy‑intensive corporates worldwide.

Analysts argue the supply‑demand balance remains ‘structurally soft’, meaning producers could easily push output into a significant surplus if they accelerate recovery. Shipping through the Strait of Hormuz has risen to roughly 7 million barrels a day, far short of the pre‑conflict 15 million, but Citi suspects actual volumes are higher due to disabled transponders. This scenario could pressure oil‑service firms and downstream margins.

Goldman Sachs trimmed its own year‑end Brent target to $80, yet still flags a best‑case scenario near $60 if Gulf flows normalize early July and global output exceeds forecasts by more than 1 million barrels daily. With Brent trading around $71 on Friday, Citi’s forecast sits below the Bloomberg median of $78, underscoring divergent views on how quickly the market can revert to balance. Investors will watch inventory data closely.