Citigroup: Escalation of Conflict Between Israel and Iran Drives Drastic Fluctuations in Oil Prices, Predicts Rise in Brent Oil Prices for the First Three Quarters.

Citigroup released a research report stating that due to the conflict between the US, Israel, and Iran entering its second week and escalating, oil prices continue to experience severe fluctuations, with Brent crude oil prices fluctuating between $84 and $117 per barrel. Ships and oil infrastructure have been attacked, and oil transportation through the Strait of Hormuz remains severely disrupted, with producers suspending about 6 to 7 million barrels of production per day. At the same time, the US and the Group of Seven (G7) are seeking to provide a safety valve for the oil market, with the International Energy Agency (IEA) agreeing to release 400 million barrels of oil from strategic reserves, the largest such release in history. The bank believes that if the IEA continues to be prepared and actually provides market liquidity, it can effectively curb the rise in oil prices. India increasing its purchase of Russian oil and China reducing its inventory reserves will also have a suppressive effect on oil prices. The bank has revised its oil price forecast for the first three quarters of this year, but maintained it for the fourth quarter. The forecast for Brent oil prices in the first three quarters has been revised from $73, $70, and $62 per barrel to $75, $78, and $68 per barrel, and it is expected that the benchmark price for Brent oil in the next one to two weeks will be adjusted from the original expectation of $80 to $90 per barrel to $80 to $100 per barrel.