Citi’s latest Oil Monitor report highlights increasing geopolitical tensions that are significantly influencing oil markets, with critical uncertainties linked to Iran and Russia developments.
“Geopolitics remain pivotal for the next move in oil up to $70 Brent, or down to the $50s,” Citi analysts stated, emphasizing the key role international relations will play in determining oil price trajectories.
The outlook is heavily influenced by setbacks in the U.S.-Iran nuclear negotiations and stalled diplomatic efforts between the U.S. and Russia regarding the conflict in Ukraine.
Citi drew attention to recent CNN reports suggesting that “Israel might be considering an attack on Iranian nuclear facilities,” based on fresh U.S. intelligence. This news caused Brent crude prices to surge close to $67 before pulling back below $65. The report warned this development could lead to a major disruption in supply, with “a tail risk of Iran’s oil production and exports being hit by as much as ~1-m b/d.”
Despite the risks, Citi analysts believe that the heightened tensions might serve as part of a broader negotiation tactic: “Escalate to de-escalate,” they explained, suggesting that these threats may be aimed at strengthening each party’s leverage.
“We continue to see the probabilities skewed toward a U.S.-Iran deal,” they added, while also noting the “current highly binary geopolitical risks” that leave outcomes uncertain.
On the Russia front, progress remains limited. “Russia remains opposed to a ceasefire,” Citi observed, even as the European Union implemented stricter sanctions. Recent attempts at diplomacy, including a meeting in Turkey between Russia and Ukraine and a call between Trump and Putin, “showed little movement.”
Brent crude has traded within a $60–$66 range this month, influenced by “tariffs and geopolitical catalysts.” Citi reaffirmed its near-term Brent price forecast of $60, indicating that the next directional move will depend on whether diplomatic efforts with Iran and Russia lead to breakthroughs or further conflict.