Fitch Ratings Raises Its Near-Term Oil and European Gas Price Assumptions in Oil & Companies News 13/05/2026 Fitch Ratings has raised its 2026-2027 oil price assumptions due to the longer-than-expected effective closure of the Strait of Hormuz amid the Iran conflict. They are now based on an assumption the strait will begin reopening around July. The higher 2026-2027 Title Transfer Facility (TTF) assumptions reflect disrupted liquefied natural gas (LNG) flows from Qatar through the strait and damage to the country’s LNG infrastructure. The key driver of the oil price change is our revised assumption on the duration of the effective closure of Hormuz. Before the war, 15 million barrels a day (mmbpd) of crude oil and 5 mmboepd of oil products transited through Hormuz, accounting for about 20% of global oil consumption. Reopening could happen relatively quickly, but the process could also be fractious and uncertain. We have assumed the strait closure will last for about five months for our revised oil price assumptions, compared with one-to-two months previously. Average annual oil prices are likely to be lower if the closure lasts for less than five months. We continue to assume a quick recovery in production following the strait’s reopening, as there has been no material damage to oil infrastructure. Oil stored on tankers is likely to be sold first, followed by the return of curtailed production. We expect production to ramp up to broadly normalised levels within several weeks, reflecting the region’s geology and producers’ ability to manage output under OPEC quotas. We also expect market oversupply, which will reduce prices. We expect Brent to stay at USD100-110/barrel in May-July during the Hormuz closure, before falling to USD70/barrel by September, a level driven by supply and demand, albeit with a residual premium. OPEC is likely to produce up to maximum capacity to offset volumes lost due to the closure. OPEC spare capacity stood at 3.6 mmbpd before the conflict. In addition, we expect non-OPEC supply growth of about 3 mmbpd, including the previously forecast 1.2 mmbpd from the US and Latin America, and a further 1 mmbpd from Kazakhstan and Venezuela. Higher prices would also incentivise production growth in the US and Russia. In March-April, the market adjusted through the release of 400 million barrels of oil reserves by the IEA and demand destruction of 1.6 mmbpd (1.5% of global demand), alongside non-OPEC production growth and the use of pipelines in Saudi Arabia and the UAE that bypass Hormuz. We estimate that, before the conflict, the spare capacity of these two pipelines was 4.5 mmbpd. Under our current assumptions of the Hormuz closure period lasting about five months and no further inventory drawdowns, a much higher demand destruction of 5 mmbpd (5% of global demand) during the closure period would be required to balance the market. However, additional inventory releases would likely result in lower demand destruction. We believe this degree of demand destruction is possible, albeit severe, given the growing share of demand from the oversupplied petrochemicals sector. Most capacity growth is in Asia, which is also the key consumer of oil transiting through Hormuz. Another demand-side adjustment is from jet fuel, given flight disruptions and high fuel prices. In January 2026, global oil stocks stood at 8.2 billion barrels, a very high level comparable to that seen in 2020 and sufficient to offset disrupted Hormuz volumes fo