Oil prices may average around $87 per barrel in 2026 as the reopening of the Strait of Hormuz in the coming months would ease crude supplies globally, according to Fitch Ratings. The global oil markets are likely to move back into surplus once shipping through the strait resumes, despite the sharp increase in prices caused by the closure of this key maritime route, the report stated.
Impact of Hormuz Reopening on Oil Prices
Fitch noted that oil prices will be lower if the Strait of Hormuz reopens earlier. However, uncertainty remains high regarding the timing of the reopening, and oil prices will remain volatile as a result. The ratings agency emphasized that the disruption has created a temporary supply bottleneck driven by logistics issues rather than a permanent reduction in oil production. The disruption does not alter the longer-term direction of the market, which is expected to return to surplus conditions later this year.
Under its base-case scenario, Fitch expects the Strait of Hormuz to reopen by the end of July, implying a closure period of about five months. Based on this assumption, the agency forecasts an average Brent crude price of $87 per barrel in 2026.
Significance of the Strait of Hormuz
The Strait of Hormuz remains one of the most important energy transit routes globally, carrying a significant portion of worldwide oil exports. Any interruption to traffic through the strait has major consequences for global energy markets and the broader economy. Before the conflict, roughly half of the oil transported through the strait originated from Saudi Arabia and the UAE. The remaining volumes were exported by Iraq, Kuwait, and Iran. China and India together accounted for around half of the destination demand for these shipments.
Short-Term Disruption vs. Long-Term Outlook
Fitch said the recent surge in oil prices reflects a short-term logistical disruption rather than a lasting loss of production capacity. The agency expects Brent crude to retreat sharply once normal shipping operations resume. The agency projects that global oil markets will return to an oversupplied state from September onward. This outlook is supported by a rapid recovery in West Asian oil production, robust supply growth from non-OPEC producers, and the possibility of OPEC raising output beyond pre-conflict production levels.
Infrastructure Resilience and Market Recovery
There has been no significant damage to oil infrastructure so far. Past experience also indicates that restoration work can be completed relatively quickly, the report said. Following the 2019 attacks on its facilities, Saudi Aramco was able to carry out repairs and resume operations within roughly two weeks. Production across the Middle East is expected to rebound rapidly, given the limited impact on regional oil infrastructure to date. When shipping resumes, oil already held in tankers and onshore storage facilities is likely to reach the market first, followed by the restoration of previously curtailed output.
Impact on Asian Markets
Before the conflict, Asia accounted for 91% of the crude oil transported through the Strait of Hormuz, with China receiving 32% and India 15%. As a result, Asian markets have borne the brunt of the petrochemical sector's response to the disruption.
