Fitch Ratings Raised Oil and Gas Price Assumptions
Energy-intensive operators should prepare for sustained volatility as geopolitical tensions influence long-term commodity pricing.
Updated on Sept. 25, 2026 in Oil and Gas
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Fitch Ratings has increased its long-term price assumptions for oil and European gas, citing heightened geopolitical risk premiums and supply disruptions in the Strait of Hormuz. The adjustment reflects market uncertainty despite projections that the global oil market will reach oversupply by the end of 2026.
Why it matters
Higher price assumptions reflect persistent supply constraints and the operational risks associated with key transit chokepoints like the Strait of Hormuz, which carries 20% of global LNG. For operators, this environment signals sustained overhead pressure and the need for flexible procurement strategies in energy-dependent industries.
Fitch Ratings set its 2027 Brent oil assumption at $70 per barrel, maintaining the 2026 forecast at $87 per barrel against a September average of $100 per barrel. These figures account for global inventories of 7.8 billion barrels and the potential for a 1.5 million barrel per day production increase outside the Middle East in 2026.
The players
Fitch Ratings
A global credit rating agency that provides independent assessments of credit risk and market conditions to institutional investors and businesses.
UAE
A major oil-producing nation currently operating at 111% of pre-war output levels to support global supply chain stability.
The details
Price adjustments are driven by persistent geopolitical risk premiums that offset production bypass efforts, such as the UAE utilizing oil shuttling to circumvent the Strait of Hormuz. While non-Middle East production is expected to rise by 1.5 million barrels per day in 2026, the market currently faces tight supply conditions. European operators remain exposed to gas price volatility, with regional storage levels currently two-thirds full.
Timeline
June 2026: Oil prices fell to $70 per barrel following an initial memorandum of understanding.
August 2026: Global oil inventories tightened to 7.8 billion barrels.
September 2026: Brent oil prices averaged $100 per barrel.
4Q 2026: The global oil market is projected to shift into oversupply.
1Q 2027: Analysts assume a potential peace agreement could reduce prices to $55 per barrel.
Market Landscape
This rating update marks a departure from the optimism surrounding the 2026-06 memorandum of understanding, reflecting a failure of those initial conflict-resolution efforts to normalize prices. The shift follows a pattern where geopolitical transit risks, particularly regarding the Strait of Hormuz, override short-term production bypass measures.
Operators should stress-test their 2026 and 2027 budgets against an $87 per barrel oil price environment rather than banking on rapid normalization. Prioritize energy efficiency measures and review fuel surcharge clauses in long-term supplier contracts to mitigate persistent commodity volatility.
The takeaway
Geopolitical friction in transit chokepoints is forcing a recalibration of long-term energy cost expectations across global markets. Operators should audit their exposure to fuel-linked costs and prepare for supply-side volatility until production reaches the projected oversupply thresholds in late 2026.
What happens next
Monitor global energy production reports for data on the projected non-Middle East production increase of 1.5 million barrels per day by 2026, and track any developments toward the assumed 1Q 2027 conflict resolution date.
Further reading
For more on how shifts in global supply chains influence your margins, visit the Oil and Gas section.
Source note: This article includes information reported by Hellenic Shipping News.
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