Fitch Ratings kept its assumption for the average Brent crude price in 2026 at $87 per barrel on Tuesday, and expected prices to face downward pressure as flows through Saudi Arabia’s East-West pipeline recover and the global market shifts to a supply surplus in the fourth quarter of 2026.
The agency raised its estimate for the average Brent price in 2027 to $70 from $65, amid a continued geopolitical risk premium and uncertainty over when the conflict in the region will end.
Oil market prices
Fitch said renewed fighting and the shutdown of the East-West pipeline pushed the average Brent price to about $100 per barrel during September, before Saudi Arabia began gradually restarting the line.
At the time of the report, Brent crude was down 0.79% at $98.64 per barrel, while U.S. West Texas Intermediate crude fell 1.4% to $94.46, after Brent earlier touched its lowest level since September 8 in Tuesday’s trading.
East-West pipeline flows gradually return
Saudi Arabia restarted the East-West pipeline on Tuesday and may resume crude oil exports from the port of Yanbu later the same day, according to 3 sources familiar with operations. Two sources said pumping had resumed at a low rate, while a full return of flows could take weeks.
Drone attacks had forced the pipeline to close on September 13, halting the loading of oil shipments from Yanbu. Saudi Aramco aims to restore the flow rate to about 4 million barrels per day, according to one source, while a shipment of oil bound for China is scheduled to be loaded at Yanbu.
Saudi Arabia had been routing about 4 million barrels per day, equivalent to nearly 4% of global oil supplies, through the East-West pipeline to bypass disruptions to shipping through the Strait of Hormuz and increase crude exports from the Red Sea coast. The pipeline has a maximum capacity of 7 million barrels per day, according to Aramco’s first-quarter 2026 report.
Traders moved oil tankers to Port Said and Sidi Kerir in Egypt in preparation for ship-to-ship crude transfers, as they awaited the resumption of Saudi exports from Yanbu and an increase in volumes available for loading through the Red Sea.
Supply surplus and gas price outlook
Fitch raised its forecast for the average price of West Texas Intermediate crude in 2027 to $65 per barrel from $60, while keeping its 2026 estimate at $80. The agency set out a wide range for Brent’s trajectory: its average could reach $85 per barrel if geopolitical risks persist, or fall to $55 if supplies recover rapidly and a lasting settlement to the conflict is reached during the first quarter of 2027.
The agency expects oil production outside the Middle East to grow by about 1.5 million barrels per day in 2026 and by an additional 1 million barrels per day in 2027, led by the United States, Canada, Brazil, Argentina and Guyana. This could push the market into a significant supply surplus next year.
Observed global inventories fell to 7.8 billion barrels in August, compared with 8.2 billion barrels at the start of the year. Fitch nevertheless expects inventory levels to remain comfortable as production and supplies recover.
In the gas market, Fitch raised its estimate for the European price in 2026 to $17 per thousand cubic feet from $14, and also raised its forecast for 2027 to $11 from $9, due to disruptions to liquefied natural gas shipments through the Strait of Hormuz. About 20% of global liquefied natural gas trade passed through the strait before the conflict broke out, while gas inventories in the European Union stand at about two-thirds of storage capacity, below levels recorded during the same period in each of the previous four years.
