Updated Version 1 - Citigroup expects oil prices to rise to $75-78 per barrel if war disrupts Iranian oil exports

Reuters, June 19 - Citigroup analysts said on Thursday that they expect the average price of Brent crude oil to rise by about 15% to 20% to around $75-$78 per barrel if the conflict between Iran and Israel escalates, leading to a disruption of Iran's oil exports of 1.1 million barrels per day. In a report, Citigroup stated, "This means the average price of Brent crude oil should be between $75 and $78 per barrel." In May, oil prices hovered around $65 per barrel. As of 12:30 PM Eastern Time on Thursday, Brent crude futures (LCOc1) rose by $1.48, or 1.9%, to $78.18 per barrel, while U.S. July crude futures (CLc1) increased by $1.72, or 2.3%, to $76.86 per barrel. (O/R) Additionally, JP Morgan stated in a report that in the most extreme scenario of a broader regional conflict, including the closure of the Strait of Hormuz, oil prices could soar to $120-$130 per barrel. Iran is the third-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), with an output of about 3.3 million barrels per day. Citigroup noted that if oil supply disruptions reach about 3 million barrels per day and last for several months, it could push oil prices up to $90 per barrel. The closure of the Strait of Hormuz could lead to a significant rise in oil prices, but Citigroup believes that this impact would be temporary as parties would focus on reopening the strait. Citigroup stated that the impact of Iran's oil export disruptions on oil prices may be less than expected due to the decline in exports and currently high oil prices, which have led to reduced purchases by China. Citigroup pointed out, "Production in other parts of the world may have increased significantly enough to offset the impact of Iran's supply disruptions, especially if the disruptions are foreseeable." Citigroup also noted that an increase in OPEC supply could mitigate the impact of Iran's oil export disruptions. On Wednesday, Goldman Sachs pointed out that as Brent crude prices rose to $76-$77 per barrel, the geopolitical risk premium is expected to reach around $10 per barrel, while Barclays stated that if Iran's exports are cut in half, crude oil prices could rise to $85 per barrel, and in the "worst-case scenario" of a broader conflict, crude oil prices could exceed $100 per barrel