On June 6, Citigroup and Barclays raised their oil price expectations. Sanctions against Russia and the postponement of Iran's nuclear agreement are the main reasons for more optimistic predictions. Citigroup predicts that Brent crude oil price will be $113 per barrel in the second quarter of 2022. Barclays currently expects the average price of Brent crude oil to be $111 this year and next.

Saudi Arabia raised the price of oil, stimulating the oil price to exceed $120 for a time

Saudi Arabia said on Sunday that it would raise oil prices in most regions except the United States. Crude oil prices began to rise after entering this week.

For Asian buyers, they need to bear the biggest price increase. The price of Arab light crude oil will be $2.10 higher than this month and $6.50 higher than the benchmark price in Oman / Dubai.

Saudi Arabia raised the price of crude oil similar to Russian Urals by $2.20 to $4.30 a barrel to European buyers.

At the same time, Brent crude oil and WTI oil prices both once exceeded $120 on Monday, and are still at high levels.

Some people pointed out that although Saudi Arabia is one of the few OPEC member states with idle capacity, it may be cautious about exploiting capacity in any large-scale way at present. At the same time, demand (especially in Asia) is rising, as evidenced by the change in crude oil prices in Saudi Arabia.

Mike Muller, head of Asia business at Vitol, said: "many Southeast Asian countries where I live have greatly exceeded expectations in terms of road transport demand. Try to buy a ticket in Singapore during the summer vacation. It's very difficult."

Kpler analyst Matt Smith pointed out last week that if demand continues to maintain this trend, crude oil prices in the international market may jump higher. He said: "if the demand of Asian countries rebounds sharply after the blockade and Russia's production continues to decline, it is not impossible to retest the high of $139 earlier this year."

Citigroup and Barclays raise oil price expectations

Citigroup and Barclays raised their oil price forecasts on Monday, citing the impact of Russia's sanctions on crude oil and the extension of Iran's nuclear agreement. Without these effects, Iran's crude oil exports would not have a substantial increase.

Citigroup raised its oil price forecast because of the serious delay in reaching the Iran nuclear agreement, which will aggravate the tension in the crude oil market. Citigroup predicts that sanctions against Iran will be lifted in the first quarter of 2023, with an increase of 500000 barrels per day in the first half of the year and 1.3 million barrels per day in the second half of the year. This is contrary to the previous prediction, which assumes that Iran's sanctions are lifted, so additional crude oil will come in mid-2022.

Now it's mid June, and the negotiations seem to have reached an impasse. Citigroup's previous prediction seems unlikely to happen. The price of Brent crude oil predicted by Citigroup in the second quarter of 2022 was $113 per barrel, higher than the previous forecast of $99 per barrel.

Citigroup also raised its expectations for the third quarter and the fourth quarter to $99 and $85 a barrel, respectively. Citigroup raised its forecast for Brent crude oil price in 2023 to $75 - an increase of $16 per barrel.

Barclays also raised its oil price expectations on the grounds that the EU imposed crude oil sanctions on Russia. Barclays currently expects the average price of Brent crude oil to be $111 this year and next - up $11 and $23 respectively this year and next. Barclays expects the price of West Texas Intermediate oil to be $108 in both years.

Barclays' estimate is that Russia's crude oil production will be reduced by 1.5 million barrels per day by the end of the year after the European Union ambassadors approved the plan to ban Russia's import of crude oil by sea for six months and ban Russia's import of refined oil for eight months last Thursday. The sanctions plan also includes a ban on providing tanker insurance to Russian ships exported to third countries, which will take effect six months after the formal adoption of the plan.