Citi has raised its near-term Brent crude oil price forecast to $70 a barrel, citing escalating geopolitical risks. Analysts led by Francesco Martoccia attribute this revision to the potential for supply disruptions, particularly from tensions involving Iran and the ongoing Russia-Ukraine conflict. The upgrade comes amidst a rally in Brent prices, which have surged from around $60 to the mid-$60s in recent weeks.

The analysts point to historical trends, noting that during past conflicts, such as the Iran-Israel attacks in mid-2025, Brent prices spiked sharply. They anticipate a similar pattern this time, with Iran facing even greater pressure. However, they caution that any price surge is likely to be temporary, as global oil supply is expected to rise by about 1.8 million barrels per day this year.

Citi's outlook is influenced by the current geopolitical climate, where demonstrations in Iran, though intense, have so far avoided key oil production regions like Khuzestan. This reduces the immediate risk of supply disruptions. Analysts also note that while oil inventories are currently comfortable, a significant outage could quickly erode spare capacity, pushing prices higher.

Looking ahead, Citi recommends selling any Brent rallies above $70 as the market balances are expected to loosen further in the first half of 2026. This outlook underscores the volatile nature of oil markets, where geopolitical tensions can quickly alter supply dynamics and price forecasts.