Citi Research lowered its three-month price forecast for Brent crude to $55 per barrel on Thursday, from a previous estimate of $60 per barrel, as U.S.-Iran nuclear deal talks resume, raising prospects for an eventual agreement.

An agreement between the U.S. and Iran, which could ease sanctions, may drive Brent prices down towards $50 per barrel, Citi said, on increased supply in the market.

But no deal, and potentially escalatory actions like curbing Iran’s nuclear programme, could push prices back to $70 per barrel or more, the bank said.

“We see probabilities at an indicative 60%:40% skew toward an eventual deal,” Citi said in the note.

U.S. Vice President JD Vance on Wednesday described the talks with Iran as “so far, so good.”

Analysts at Citi acknowledged downside risks that could push prices to $55 occasionally throughout the middle of the year.

The bank maintained its long-term forecast of $60 a barrel Brent in 2025 despite the recent downward trend in oil prices.

“The recent sell-off has come with tariffs and OPEC+ adding supply back to market at an expedited rate, which could yet pause/reverse,” Citi said.

On Saturday, OPEC+ agreed to increase oil production for a second straight month, boosting output in June by 411,000 barrels per day despite falling prices and weakened demand expectations.

Meanwhile, ANZ maintained its price target over the next three months of $55 per barrel for oil, but warned that risks were “firmly skewed to the downside.”

Brent crude futures were trading at $61.61 a barrel as of 0554 GMT.
Source: Reuters