Citi Warns Sticky Iran Talks May Lift Oil Prices Again Soon

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On May 9, 2026, oil markets reopened with renewed tension as Citigroup warned that unresolved U.S.-Iran negotiations could keep crude prices elevated through the coming months.

Oil Rally Faces Another Test as Iran Risks Persist

Oil prices could rise further if negotiations between Washington and Tehran remain difficult, according to Citigroup, which warned that supply risks tied to the Strait of Hormuz are still not fully reflected in the market. The bank maintained its zero-to-three-month Brent crude forecast at $120 per barrel while projecting second-quarter prices to average $110.

China Demand Drop Helps Cushion Supply Fears

Citigroup said softer Chinese demand has helped calm some pressure across global energy markets. China’s oil imports reportedly declined to around 9.2 million barrels per day in April and May, compared with an estimated 2025 average of 11.6 million barrels per day.

The bank also pointed to inventory drawdowns, Strategic Petroleum Reserve releases, and occasional signs of de-escalation as temporary buffers against sharper price spikes. Still, Citi warned that oil markets continue underestimating long-term supply risks.