Fitch Ratings Raises Its Near-Term Oil and Gas Price Assumptions in Oil & Companies News 13/03/2026 Fitch Ratings has raised its 2026 Brent oil price assumption to USD70/barrel from USD63/barrel due to the effective closure of the Strait of Hormuz, which we assume to be temporary, following the outbreak of the Iran conflict. We expect the current spike in prices to be followed by a drop to levels driven by market fundamentals once the strait reopens. However, the geopolitical risk premium is substantial, and there is uncertainty over the duration of the conflict and transit disruption. A more prolonged closure could drive our annual average oil and European gas prices higher. The higher 2026 TTF assumption reflects the Middle East conflict, cold weather, lower supplies from the US, while the increased 2027-2028 Henry Hub gas assumptions reflect higher domestic demand and LNG export economics. The limited 2026 increases to Brent and WTI reflect our view that the closure of the strait will be short-lived, as there are strong incentives to de-escalate or at least reduce the direct risks to transit, given the economic importance of the strait. About 20 million barrels a day (mmbpd) of crude oil and petroleum products transited the strait before the conflict, accounting for about a quarter of global seaborne oil trade and a fifth of global oil consumption. Alternative routes are limited. Saudi Aramco can export 5mmbpd through the East-West pipeline, which runs to an export port on the Red Sea. The UAE operates a 1.5mmbpd pipeline (with a maximum achieved flow of 1.8mmbpd) linking its oil fields to the Fujairah export terminal on the Gulf of Oman. Oil transit volumes have dropped to a minimum due to the high risk of Iranian attacks on tankers and difficulties in obtaining war risk insurance for vessels. Naval protection for tanker navigation could be considered if the strait were to remain effectively closed for a protracted period, as occurred during the 1980s Iran-Iraq war. The US International Development Finance Corporation has already announced the plan to deploy maritime reinsurance, including war risk cover, in the Gulf region for USD20 billion. The global oil market was oversupplied before the conflict, which could help mitigate annual oil price increases. Global supply increased by about 3mmbpd in 2025, while demand grew by well below 1mmbpd. We forecast supply growth of 2.4mmbpd in 2026, with demand growth of about 0.8mmbpd. Half of the 2025-2026 supply increases come from unaffected non-OPEC+ producers. OPEC+ spare production capacity is 4.3mmbpd. Total global inventories stood at 8.2 billion barrels at end-2025, similar to the levels seen in 2020. This is sufficient to cover a halt in oil shipments via the Strait of Hormuz for over 400 days. G7 countries have discussed an option to release 400 million barrels from strategic oil reserves. Russian output remained largely flat at around 9.2mmbpd in 2025. Its crude exports fell by 0.35mmbpd in January 2026 compared with December 2025 due to sanctions. However, the US has provided a temporary waiver to allow India to buy Russian oil that was already at sea. The increased 2026 TTF gas assumption reflects a combination of conflict-related supply reduction in the Middle East, including a halt in production at Ras Laffan, which has increased competition for LNG in the global market, and a weather-related spike in gas prices in early 2026. European gas storage is about 29% full, 7pp lower t