London – Fitch Ratings said the effective closure of the Strait of Hormuz, which has driven recent increases in oil prices following attacks on Iran, is likely to be temporary due to the strait’s critical economic importance. The agency added that a global oil supply surplus would help limit further price increases.
In a statement, Fitch assessed developments related to the Strait of Hormuz and their implications for oil markets.
Closure Likely to Be Temporary
Fitch noted that although the strait has not been officially closed, shipping traffic has been disrupted as vessels avoid the route due to the risk of attacks by Iran or its proxies. Major oil companies have reportedly halted shipments for security reasons, while insurers have withdrawn war-risk coverage for vessels operating in the area.
However, the agency said it expects the de facto closure to be short-lived.
“The strait is a vital artery for seaborne oil transportation, and alternative routes are limited,” Fitch said.
Supply Surplus to Curb Price Surge
The agency emphasized that the current surplus in global oil markets should help cap price increases and mitigate potential disruptions to Iranian oil exports.
Fitch added that it does not foresee a significant upward revision to its forecast of an average Brent crude price of $63 per barrel in 2026.
Before the conflict, approximately 20 million barrels per day of crude oil and petroleum products passed through the Strait of Hormuz, accounting for roughly one-quarter of global seaborne oil trade and about one-fifth of global oil consumption.
About half of the oil transported through the strait originates from Saudi Arabia and the United Arab Emirates, with the remainder coming from Iraq, Kuwait, and Iran. Around half of these exports are destined for China and India.
Fitch stated that a prolonged closure is not considered its base-case scenario, as such a development would significantly affect both exporting and importing countries. If the strait were to remain effectively closed for an extended period, naval protection for tankers—similar to measures taken during the 1980s Iran-Iraq War—could be considered.
Limited Global Impact Expected
While Iran is a major oil producer, producing about 3.5 million barrels per day and exporting roughly 2 million barrels daily, this accounts for only about 3.5% of global crude output. Fitch said any potential disruption to Iranian supply could likely be offset by the global supply surplus.
The agency also highlighted that Saudi Arabia and the United Arab Emirates have some infrastructure capable of bypassing the strait, which could help ease transit disruptions.
Nevertheless, Fitch cautioned that uncertainty remains regarding the duration and intensity of the conflict.
“A prolonged blockage of the strait or significant and lasting damage to regional oil and gas production and transportation infrastructure would materially affect oil markets and likely result in a more substantial upward revision to our 2026 oil price forecast,” the statement said. “Any significant disruption to Iranian oil production would increase volatility in oil prices.”
Source: Patronlar Dünyası/ Prepared by: İlayda Gök