Fitch expects average oil price at $70 per barrel in 2026

Fitch Ratings said the recent rise in oil prices, driven by tensions in the Middle East, is “temporary,” forecasting that Brent crude will average around $70 per barrel in 2026.

In an interview with CNN Business Arabic, Angelina Valavina, Head of the Natural Resources & Commodities team at Fitch, noted that market fundamentals still point to a supply surplus, and that rising geopolitical risks are expected to gradually fade as the market returns to a true balance between supply and demand.

Despite the sensitivity of the situation, Fitch believes any disruption to navigation would be short-lived due to the interconnection of international interests.

The agency highlighted that global inventories exceeding 8 billion barrels provide a substantial buffer to offset any temporary supply shortages.

Valavina added that if the strait were to remain closed for six months, the average annual price could rise to $120.

However, she dismissed this scenario, given the expected growth in global supply of about 2.5 million barrels per day (bpd) this year, compared to a potential increase in demand of less than 1 million bpd.