Baku:Fitch Solutions forecasts a decrease in the average annual price of Brent crude oil to $71 per barrel by 2027, with this year’s average expected to be $83 per barrel.
According to Azeri-Press News Agency, the company also projects the average price of West Texas Intermediate (WTI) crude to reach $79 per barrel in 2026 and decrease to $68 in 2027. The OPEC oil basket is anticipated to average $87 in 2026 and $70 in 2027.
Fitch Solutions highlights current pressures on Brent prices, attributed to a potential agreement between Iran and Oman regarding the resumption of shipping through the Strait of Hormuz. Brent futures fell to $79.4 per barrel on August 5, marking a 12.5% decline over the week, while Dated Brent dropped 8.4% to $83.5 per barrel.
The company’s baseline scenario suggests that shipping through the Strait of Hormuz could resume in the third quarter of 2026. However, Fitch Solutions warns of significant risks in the oil market that may impede any potential agreement.
The report indicates that the pace of full oil shipment restoration in the region depends on several factors, including possible delays in agreement implementation, mine-clearing operations, the responses of shipowners, freight companies, operators, and insurers, as well as Houthi activity in the Red Sea. Consequently, oil prices are expected to remain volatile in the upcoming weeks and months.
Despite falling crude oil prices, conditions in the oil products market remain constrained. Asian refineries have reduced production significantly following the US-Iran conflict, affecting the supply of refined products. Demand has not decreased proportionately, resulting in depleted inventories.
Additionally, increased attacks on Russian oil refining infrastructure have further pressured market supply. Moscow has extended restrictions on gasoline and diesel exports until January 2027. This has led to a widening price spread between low-sulfur gasoil and Brent, from around $20 per barrel last year to approximately $80 per barrel now.
Fitch Solutions believes these factors are contributing to increased price risks in the oil market.