Fitch Solutions Predicts Steep Drop in Oil Prices by 2027

Fitch Solutions has projected a decline in global oil prices over the next few years, with Brent crude expected to average $83 per barrel in 2024 and drop to $71 per barrel by 2027. Similarly, WTI crude is forecasted to reach $79 per barrel in 2026 before falling to $68 in 2027, while the OPEC oil basket is anticipated to decrease from $87 to $70 per barrel over the same period.

The forecast comes amid recent volatility in Brent prices, which have faced downward pressure due to reports of a potential agreement between Iran and Oman to resume shipping through the Strait of Hormuz. On August 5, Brent futures closed at $79.4 per barrel, marking a 12.5% drop over the week, while Dated Brent fell 8.4% to $83.5 per barrel.

Fitch Solutions suggests that shipping through the Strait of Hormuz could resume in the third quarter of 2026 under its baseline scenario. However, the company warns of significant risks, including delays in implementing the agreement, mine-clearing operations, and ongoing Houthi activity in the Red Sea, which could keep oil prices volatile in the near term.

Despite the decline in crude oil prices, the oil products market remains tight due to reduced production from Asian refineries following the US-Iran war and increased attacks on Russian refining infrastructure. Moscow has extended restrictions on gasoline and diesel exports until January 2027, widening the price spread between low-sulfur gasoil and Brent to around $80 per barrel, up from approximately $20 per barrel a year earlier.