Oil Prices Stay Strong Now—But Citi Sees a Possible Drop Later

Advanced | February 23, 2026

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Citi oil price forecast: Geopolitics Is Keeping Oil Prices Supported

Oil prices have been getting a lift lately, and Citi says geopolitics is a big reason why. This Citi oil price forecast is basically a reminder that political risk can act like a “price floor” when traders fear supply shocks. In a recent note, the bank explained that rising pressure around Russia and Iran could keep oil prices supported in the near term—especially while governments tighten sanctions and traders worry about supply disruptions. (Reuters)

Brent crude, for example, climbed from about $60 per barrel to near $70 in roughly a month, according to the same reporting. (Reuters)

Why Peace Deals Could Change Everything

Here’s the twist: Citi also thinks oil might not stay high forever.

Citi’s base case is that the U.S. helps move along a Russia–Ukraine peace deal and de-escalation with Iran by or during the summer—conditions that could push Brent down to around $60–$62 per barrel later in 2026. (Reuters)

In plain English: if markets stop pricing in “war risk” and “sanctions risk,” energy prices can cool off fast.

The Sanctions Angle: Not Just Russia and Iran

Citi’s view also connects to something Europe has been discussing. Reuters reported that the European Union proposed extending sanctions in a way that could include ports in third countries that handle Russian oil. If moves like that continue, supply may feel “tighter,” and prices could stay supported for longer. (Reuters)

Meanwhile, day-to-day oil trading has also been influenced by headlines about possible U.S.–Iran nuclear talks and what that could mean for Iranian barrels coming back to market. (Reuters)

What OPEC+ Might Do Next

Citi added an important “if.” If disruptions keep Brent in a $65–$70 range in the coming months, the bank expects OPEC+ could respond by increasing output from spare capacity. (Reuters)

That lines up with other Reuters reporting that OPEC+ sources have discussed resuming output increases from April, as the group looks ahead to stronger summer demand. (Reuters)

The Asia Factor: Discounted Oil Still Moving

Another detail: Citi said China has continued buying Russian and Iranian oil at discounted prices—both for use and for stockpiling—and expects that pattern to continue in 2026 as long as sanctions remain (Reuters).

Reuters also reported broader context: Asia’s crude imports have been extremely strong, and geopolitics is shifting the supplier mix across major buyers (Reuters).

What This Means for You (Even If You Don’t Buy Oil)

Oil prices don’t just affect drivers at the gas station. They hit shipping costs, airline tickets, and the price of everyday products that move through global supply chains.

The takeaway: geopolitics can push prices up fast, but diplomacy (if it succeeds) can pull them back down—sometimes just as quickly. Bottom line: this Citi oil price forecast says today’s risk premium could fade quickly if peace progress shows up on the calendar. (Reuters) (Reuters)

Vocabulary

Geopolitics (noun) – how geography and politics influence global power and decisions.
Example: Geopolitics often affects oil prices because conflict can disrupt supply.
Supported (adjective) – helped to stay strong or stable.
Example: Oil prices were supported by worries about sanctions and supply disruptions.
Sanctions (noun) – official restrictions meant to pressure a country.
Example: Sanctions can reduce oil exports by limiting who can buy or ship it.
Enforcement (noun) – making sure a rule or law is followed.
Example: Tighter enforcement of sanctions can quickly change market prices.
Supply disruption (noun) – an event that interrupts normal supply.
Example: A supply disruption can cause prices to rise even without higher demand.
De-escalation (noun) – reducing tension or conflict.
Example: De-escalation between countries can ease market fears and lower prices.
Base case (noun) – the most likely forecast scenario.
Example: Citi’s base case assumes peace progress later this year.
Benchmark (noun) – a standard used for comparison.
Example: Brent is a global benchmark used to price many kinds of oil.
Spare capacity (noun) – extra production ability that can be turned on.
Example: OPEC+ may use spare capacity if prices stay high.
Stockpiling (verb/noun) – storing large amounts for future use.
Example: Some countries keep stockpiling oil to prepare for future shortages.

Discussion Questions (About the Article)

Why does Citi think geopolitics is supporting oil prices right now?
What two peace-related developments could lower oil prices later this year?
How do sanctions influence oil prices, even if demand doesn’t change?
Why might OPEC+ increase production if prices stay in the $65–$70 range?
What are two everyday ways higher oil prices can affect normal people?

Discussion Questions (About the Topic)

Should oil prices be this sensitive to political events? Why or why not?
In your opinion, do sanctions work as a policy tool? What are the trade-offs?
How can companies protect themselves when energy prices are unstable?
What happens to a country’s economy when fuel prices suddenly spike?
If you were a government leader, how would you balance cheap energy with foreign policy goals?

Related Idiom

“A double-edged sword” – something that has both benefits and risks.

Example: Sanctions are a double-edged sword: they can pressure governments, but they can also raise prices for everyone.

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Inspired By

(Reuters) — Citi says geopolitics to support oil near term; peace deals seen lowering prices later (Feb. 16, 2026)
(Reuters) — Oil drifts ahead of U.S.–Iran nuclear talks (Feb. 16, 2026)
(Reuters) — Asia gobbles up crude; geopolitics is shifting supplier mix (Feb. 18, 2026)