Global crude inventories are ample enough to offset a closure of the Strait of Hormuz for more than a year, Fitch Ratings said, easing concerns of a sharp price spike amid escalating tensions in the Middle East.
The conflict involving Iran has prompted vessels to avoid the strait, led oil majors to suspend transits and forced insurers to withdraw war risk coverage.
The waterway typically handles about 20 million barrels per day, or a quarter of global seaborne oil trade.
Fitch expects any disruption to be temporary, maintaining its forecast for Brent crude to average $63 a barrel in 2026, unchanged from its December 2025 projection.
Global oil inventories rose by 1.3 million barrels per day in 2025, lifting reserves to 8.2 billion barrels, the highest since March 2021. Fitch said the stockpile could cover more than 400 days of halted shipments through Hormuz.
Supply growth is also projected to outpace demand, with output expected to increase by 2.4 million barrels per day in 2026, compared with demand growth of 0.8 million barrels per day.
Non-OPEC+ producers account for half of the supply gains, while OPEC+ maintains spare capacity of 4.3 million barrels per day.
Exporters are using alternative routes to mitigate risk. Saudi Arabia’s East–West pipeline can divert up to 5 million barrels per day to the Red Sea, while the UAE’s Fujairah terminal bypasses Hormuz entirely, handling 1.8 million barrels per day.
Fitch cautioned that a prolonged closure or damage to regional oil infrastructure could force a revision of its outlook. “Oil price volatility would rise if there were to be any material disruption to Iranian oil production,” the agency said.
