Oil shock to cool soon? Fitch sees Brent falling to $70 as Hormuz reopening could ease supply fears – Firstpost

Global oil prices could see a sharp correction later this year as geopolitical tensions ease and supply routes normalise, according to Fitch Ratings.

The ratings agency has projected Brent crude oil to average $87 per barrel in 2026, assuming the Strait of Hormuz reopens by the end of July after a five-month disruption.

Fitch expects crude prices to remain elevated in the near term due to supply concerns, with Brent averaging $100–110 per barrel during May-July. However, prices are projected to fall to around $80 per barrel in August and further ease towards $70 per barrel from September onwards.

“The Hormuz blockade creates a logistical challenge, which once removed is likely to result in a quick drop in prices,” Fitch said in its report.

The Strait of Hormuz, one of the world’s most critical energy corridors, handles nearly 20 million barrels of oil equivalent per day, accounting for around one-fifth of global oil consumption. The disruption has triggered a geopolitical risk premium in crude prices despite no major damage to oil production infrastructure.

Fitch said the current spike is largely driven by transportation constraints rather than a permanent supply loss, suggesting that markets could quickly rebalance once shipping resumes.

Angelina Valavina, Managing Director at Fitch Ratings, said oil price movements now depend heavily on the timing of the reopening.

“Oil price dynamics hinge on the timing of Hormuz reopening. Our assumed end-of-July reopening would push the market back into oversupply in 4Q26 and drive oil prices lower. The risk remains binary,” she said.

The agency added that weaker market fundamentals could return once geopolitical risks fade, potentially putting further downward pressure on crude prices in the final quarter of 2026.