Fitch sees oil oversupply in Q4 2026, Brent to fall to $70 by September; there's one big assumption

Global oil markets are likely to swing back into oversupply in the fourth quarter of 2026, pushing Brent crude prices down to about $70 a barrel by September after a temporary spike caused by disruptions in the Strait of Hormuz, Fitch Ratings said on Monday.

The ratings agency said it expects Brent to remain at $100-$110 per barrel during June and July, before retreating as supply recovers and market fundamentals reassert themselves.

The outlook assumes the Strait of Hormuz reopens by the end of July and that oil production resumes quickly.

"OPEC is likely to produce up to maximum capacity to offset volumes lost due to the closure," Fitch said, noting the producer group had spare capacity of 3.6 million barrels per day before the conflict.

Fitch also raised its 2026 outlook for the global oil and gas sector to "improving" from "neutral", citing higher near-term oil and gas price assumptions that are expected to boost revenues and earnings for producers.

The agency now forecasts Brent crude to average $87 per barrel in 2026, compared with an average of $68 per barrel in 2025.

The forecast is based on an assumption that the Strait of Hormuz remains shut for about five months, longer than its previous expectation of one to two months.

Fitch said production should recover within weeks of the strait's reopening because there has been no significant damage to regional oil infrastructure.

Stored crude held on tankers and in onshore facilities is expected to reach markets before curtailed output resumes, it added.

The agency also raised its assumption for Europe's Title Transfer Facility gas benchmark to $14 per thousand cubic feet in 2026 from about $12 in 2025.

While higher commodity prices should lift revenues and earnings across the sector, Fitch said the impact on cash flow and leverage “could be more limited depending on working capital swings, applicable windfall levies and issuers’ financial policies.”

Among Gulf producers, Omani companies are best insulated from the disruption because their exports do not rely on the Strait of Hormuz.

Saudi and UAE producers, meanwhile, have access to alternative pipeline routes.

Kuwaiti and Qatari companies remain the most exposed, Fitch said.