Fitch Sees Oil at $120 If Hormuz Closure Persists

Global oil prices could surge significantly in 2026 if disruptions in the Strait of Hormuz persist, according to new projections from Fitch Ratings.

In its latest report, the agency said the average price of Brent crude oil could reach $120 per barrel if the strait remains closed for six months. A shorter, three-month disruption would see prices average closer to $100 per barrel over the year.

Latest Oil Prices:

WTI Crude $98.23 +2.68 +2.80%

Brent Crude $112.2 +3.54 +3.26%

Murban Crude $146.4 +22.33 +18.00%

WTI Midland $101.2 +2.66 +2.70%

Opec Basket $135.1 +2.19 +1.65%

Indian Basket $156.3 +9.90 +6.76%

Natural Gas $3.095 -0.071 -2.24%

Gasoline $3.286 +0.159 +5.09%

Heating Oil $4.608 +0.266 +6.14%

The outlook comes amid severe shipping disruptions caused by the ongoing Iran War March 2026, which has significantly impacted maritime traffic through one of the world’s most critical oil corridors.

Fitch estimates that a closure of the strait could remove up to 15 million barrels per day from global oil flows, even if limited volumes continue to pass through.

Under a three-month closure scenario, Brent crude could average around $130 per barrel during the disruption period before easing to approximately $90 by year-end.

In a more prolonged six-month shutdown, prices could fluctuate between $130 and $170 per barrel during the crisis, before also retreating toward $90 as supply conditions stabilize later in the year.

Despite these risk scenarios, Fitch maintains a base-case forecast of $70 per barrel for 2026. In this scenario, prices are expected to spike to around $100 in March, average $90 in the second quarter, and then decline to roughly $60 by the end of the year.

The agency assumes no immediate demand destruction in the early stages of a temporary closure, citing sufficient global supply buffers. These include existing production levels and emergency stock releases coordinated by the International Energy Agency, which has announced plans to release up to 400 million barrels from reserves.

However, prolonged disruptions are expected to weigh on consumption. Fitch forecasts a decline in global oil demand of about 2.5% under a three-month closure scenario, and up to 5.5% if the disruption extends to six months.

As uncertainty around the Strait of Hormuz continues, markets remain highly sensitive to geopolitical developments, with energy prices likely to stay volatile in the months ahead.