Fitch Ratings has warned that global energy prices are likely to rise following the effective closure of the Strait of Hormuz, a key transit route for roughly a quarter of the world’s seaborne oil trade.

The London-based credit rating agency has revised its 2026 Brent crude oil price forecast upward to $70 per barrel from its previous estimate of $63, citing heightened geopolitical risks stemming from the ongoing conflict in Iran.

Fitch noted that while the surge may be temporary, “the geopolitical risk premium is substantial, and there is uncertainty over the duration of the conflict and transit disruption.”

In its latest report, the agency highlighted that the disruption has also pushed European gas prices higher, influenced by cold weather, reduced US supplies, and conflict-related supply cuts in the Middle East.

“The higher 2026 TTF assumption reflects the Middle East conflict, cold weather, and lower supplies from the US,” Fitch said, adding that 2027-2028 Henry Hub gas prices are expected to rise due to “higher domestic demand and LNG export economics.”

The report emphasised that, despite a global oversupply before the conflict, roughly 20 million barrels of crude and petroleum products per day normally pass through the Strait of Hormuz. Fitch cautioned that any prolonged closure of the strait could push annual average oil and gas prices even higher, with alternative export routes remaining limited.

This development underscores the vulnerability of global energy markets to geopolitical tensions in the Middle East, with potential knock-on effects for prices worldwide.