Citigroup Sees Oil Prices Falling to $60–$65 by Early 2027

Global oil prices are expected to trend lower over the next 6–12 months, potentially settling in a range of $60 to $65 per barrel by the first quarter of 2027, as supply conditions ease following the resumption of normal tanker traffic through the Strait of Hormuz, according to a new outlook from Citigroup.

The forecast comes as energy markets adjust to shifting geopolitical dynamics after the United States and Iran signed a memorandum of understanding aimed at ending their conflict. The agreement has already led to the reopening of key maritime routes, with oil tankers returning to regular transit through the strategically vital waterway.

In a note cited by Reuters, Citi said the normalization of flows through the Strait of Hormuz is expected to gradually remove the geopolitical risk premium that has supported crude prices in recent months.

The bank’s outlook assumes continued stabilization in Middle East shipping lanes and a steady increase in available supply as previously disrupted volumes return to the market.

Oil markets have already begun reacting to the easing of tensions. Tanker activity through the Strait has resumed, and the United States has moved to lift restrictions on Iranian shipments under the terms of the temporary agreement, even as broader political disagreements between the two countries remain unresolved.

Citi’s projection suggests that once short-term volatility fades, fundamentals, particularly supply recovery and inventory normalization, will dominate price direction, putting sustained downward pressure on crude benchmarks through 2026 and into 2027.