Citigroup Forecasts Brent Oil Price Could Drop Below $60 by Year-End

Brent crude oil prices, currently around $72 per barrel, are projected by Citigroup economists to fall below $60 by the end of 2024. This forecast follows easing tensions over the Strait of Hormuz, a critical shipping route connecting Persian Gulf oil producers to global markets. Analysts noted that "baseline conditions are returning," with shipping traffic normalizing, weak demand from China, and a sharp weakening in crude oil markets. Inventory levels have also been less depleted than expected.

The resumption of oil flow through the Strait of Hormuz has increased short-term supply, adding barrels to refineries after alternative arrangements were made during the recent conflict. The return of regular maritime traffic and improved shipping volumes are contributing to a gradual market stabilization following significant disruptions. The Strait had been effectively blocked during the US-Iran conflict that erupted in late February, causing turmoil in energy markets. With a ceasefire agreement between Tehran and Washington, both sides are working toward a permanent deal, which market participants expect will sustain stability.

As a result, Brent crude prices have dropped about 30% in the second quarter, erasing gains made during the conflict. While short-term volatility is expected due to insurance market adjustments, shipping routes, and logistical bottlenecks, the overall trend points to normalization. Other financial institutions share this outlook: Goldman Sachs anticipates a return to oversupply as war impacts fade, and Morgan Stanley has recently lowered its price forecasts twice. Brent last traded below $60 in January. Citigroup economists recommend selling when prices rise during summer and expect Brent to settle between $60 and $65 by year-end, supported by geopolitical stability and steady global shipping.