Citi increased its oil price forecast today with expectations for geopolitical conflicts to drive the price of the energy source higher in 2025. The bank expects Brent crude to rise to an average of $67 a barrel this year, compared to its prior estimate of $62 per barrel. Citi’s average 2025 forecast for WTI crude was also increased to $63 a barrel.
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A Citi note explained its reasoning behind these updated oil price forecasts. The firm believes “heightened, sustained geopolitical risks in Iran/Russia-Ukraine” could “potentially wipe out the 2025 oil balance surplus.”
How Will Trump Affect Oil Prices in 2025?
While Citi expects oil prices to increase, a wild card could change things. The bank notes that President Donald Trump “appears intent on dealmaking.” This could alter oil prices if the new President can resolve geopolitical conflicts between nations.
Additionally, President Trump wants to increase oil production in the U.S. He’s already announced an energy emergency, allowing additional oil production and looser regulations for the sector. Trump also rolled back the government’s climate change commitments and electric vehicle (EV) mandate, putting oil back in focus as the main energy source in the U.S. moving forward.
How Does This Affect Oil Stocks?
Oil stocks will likely benefit from the Trump administration’s stances. Fewer regulations and faster permit grants could see the market take off over the next four years. As such, investors might consider taking a stake in oil stocks to get ahead of those potential gains.
Turning to the TipRanks comparison tool, traders will see some of the best oil stocks. If it’s a huge upside potential and Wall Street’s backing that traders seek, then ConocoPhillips (COP) is one of the best bets with its Strong Buy rating and $134.33 price target, representing a potential 28.82% upside. Chevron (CVX) is another powerful option with the same rating and a $175.56 price target, representing a possible 10.85% upside.
