Citigroup: If US-Iran negotiations remain at an impasse, oil prices may rise further and the market is underestimating tail risks

1. Citibank stated that if negotiations between the US and Iran remain deadlocked, oil prices may rise further. Although factors such as reduced inventories, the release of strategic petroleum reserves, a decline in Chinese imports, weak demand, and signs of easing tensions have helped alleviate market pressures, the increased difficulty in reaching an agreement has heightened short-term upside risks for oil prices. 2. Citibank maintains its Brent crude price forecast at $120 per barrel over the next three months. The average price is expected to be $110 in Q2, drop to $95 in Q3, and fall further to $80 in Q4. 3. Citibank, citing vessel tracking data, stated that China’s crude oil imports in April and May could fall by about 2.4 million barrels per day, dropping from an average of around 11.6 million barrels per day in 2025 to about 9.2 million barrels per day, which has also helped ease pressure on the global oil market to some extent. 4. Citibank stated: “We still believe the crude oil market is underestimating duration risks and tail risks.”