Fitch Raises 2027 Oil Price Forecast Amid Ongoing Geopolitical Tensions

Fitch Ratings has revised its oil price projections for 2027 and lifted its TTF gas forecasts for 2026-2027, citing the Iran conflict as a factor. The agency left its 2026 Brent assumption unchanged at USD87 per barrel but nudged up its 2027 forecast to USD70 per barrel from USD65 per barrel to account for a geopolitical risk premium.

Fitch anticipates that global oil markets will shift into oversupply during the fourth quarter of 2026, which would weigh on prices. However, with crude flows through Hormuz and other pipelines reaching close to pre-war levels, Fitch expects prices to ease once the East-West pipeline resumes operations.

The agency also pointed out that ongoing transit of oil through Hormuz, via oil shuttling, is viable even in the absence of a peace agreement. This traffic, along with two pipelines in Saudi Arabia and the UAE that circumvent Hormuz, keeps crude flows at 90% of pre-war levels.

In August, UAE output reached 111% of pre-war levels, while Saudi oil supply was at 75% of the pre-war level according to OPEC. Fitch expects the global oil market to be significantly oversupplied in 2027 whether or not a peace deal is reached, though an agreement would amplify the oversupply.