Fitch Ratings Sees Strait of Hormuz Reopening in July

Summary

Angelina Valavina of Fitch Ratings discusses the firm's assumption that the Strait of Hormuz will reopen in July, which underpins their Brent crude price forecast of $70-87 per barrel for 2026. She highlights key factors including the US driving season, second-quarter economic data, midterm elections, and China's strategic oil reserves as influencing the timeline. The risk around the reopening is described as binary, with prices likely lower if it happens earlier and higher if later.

• Fitch assumes Strait of Hormuz reopening in July 2026.
• Brent price forecast is $70-87 per barrel for 2026 based on that assumption.
• Key factors for July timeline: US driving season, Q2 GDP/inflation data, midterm elections, China's 1.2 billion barrel reserves.
• China imports about 5 million barrels per day through the Strait and reserves cover imports through October.
• Risk is binary: earlier reopening lowers prices, later reopening raises prices.
• Uncertainty in peace deal negotiations and timeline acknowledged.