Fitch Ratings Sees Strait of Hormuz Closure as Short-Term
The rating organization noted that the surplus in the worldwide oil market acts as a cushion against geopolitical tensions, restricting possible price surges despite the practical closure of the strategic waterway.
According to the report, the current global oil oversupply “creates a buffer that would limit the geopolitical risk premium typically associated with supply disruption concerns.”
Fitch Ratings anticipates that the regional conflict will endure less than a month, assuming interruptions to shipping and energy infrastructure are short-lived.
The Strait of Hormuz remains a vital channel for international energy commerce, with around 20 million barrels of oil and refined products transiting daily, accounting for 20% of the planet’s supply.
Although Brent crude surged over 10% to surpass $80 per barrel since last week, Fitch Ratings forecasts that prices will level off as alternative routes and elevated inventory levels help absorb the supply shock.
The report also emphasized that while nations like Saudi Arabia and Türkiye possess sufficient resources to act as a buffer, states such as Iraq, Kuwait, and Qatar are more immediately vulnerable due to their dependence on this route.
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