Citigroup’s latest call for Brent crude to tumble toward $50 on a Russia-Ukraine de-escalation feels more like an echo chamber than a fresh forecast. Senior commodities strategist Eric Lee told Bloomberg Friday that easing geopolitical tensions could “precipitate a faster move” toward the bank’s bear-case scenario — never mind that Brent is already down roughly 18% this year to near $61, thanks to what some call a slow-building supply glut.
But Citi’s tone has swung wildly over the past ten months. Back in January, the bank actually raised its 2025 forecast to $67 Brent and $63 WTI, citing “heightened, sustained geopolitical risks in Iran/Russia-Ukraine.” A few months later and Citi is now warning of a possible $50 collapse should those same risks evaporate. That’s not a shift in sentiment — it’s a 25% haircut wrapped in a new narrative.
Earlier this month, Citi had already sounded a bearish note, cautioning that market players were questioning whether $60 could hold as a price floor amid rising global inventories. Vortexa data showed 1.2 billion barrels of crude sloshing around the seas — the most since 2016 — though China’s steady stockpiling has kept that glut from crashing prices outright.
So, does a ceasefire really doom oil to $50? History says maybe not. Every few quarters, Citi rolls out a fresh bear case — often tethered to whichever headline feels most urgent. In practice, OPEC+ restraint, steady Chinese demand, and Western SPR refilling have consistently kept Brent above the big-scary-five-oh.
If anything, the real question is whether Riyadh will blink first. A $50 Brent would gut shale’s economics and hand OPEC+ the steering wheel again. And while Washington may welcome cheaper barrels heading into an election cycle, Saudi Arabia’s patience for subsidizing U.S. policy goals has always been… limited.
In short: Citi’s $50 thesis makes for a dramatic headline. Reality, as usual, trades higher.
By Julianne Geiger for Oilprice.com
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