Citigroup expects oil prices to rise to $90 a barrel if the Strait of Hormuz is closed

Citigroup expects Brent crude prices to rise to around $90 a barrel if the Strait of Hormuz, through which 20% of global supply passes, is closed.

The bank’s analysts, including Anthony Yuan and Eric Lee, wrote in a research note that “any closure of the strait could lead to a sharp price spike,” in the bank’s scenario that predicts higher prices.

They added, “We believe the duration of the closure will be short, as all efforts will be focused on reopening it, and therefore the closure is unlikely to last for several months.”