BMI Expects Brent to Remain Above $100 Until 2027 Amid Hormuz Pressure
BMI, a Fitch Solutions company, expects Brent crude to remain above $100 until 2027 amid ongoing trade restrictions in the Strait of Hormuz, viewing $113.69 as a baseline rather than a passing peak.
BMI research unit, part of Fitch Solutions, expects Brent crude to remain above $100 per barrel until 2027, according to a note reported by the Egyptian platform Enterprise AM.
The note attributed its forecast to ongoing trade restrictions in the Strait of Hormuz, the maritime passage through which a large portion of Gulf oil and gas exports flows, keeping the risk premium high in the market.
Despite the decline in prices over recent sessions on hopes of de-escalation between Saudi Arabia and Iran, BMI considers the $113.69 per barrel price reached by Brent to represent a new baseline rather than a passing peak, according to the note.
This forecast means energy prices will remain relatively high for longer, supporting revenues for exporting countries in the Gulf while raising import and energy costs for consuming countries in the region and globally.
What do these terms mean?
Strait of Hormuz: A narrow waterway connecting the Gulf to the Indian Ocean, through which a large portion of oil and gas exports passes.
Baseline level: A price used as a reference for forecasts, rather than being treated as a peak or temporary exception.
Risk premium: An increase in price against the potential for supply disruption or worsening conflicts in the region.
Brent: A global benchmark crude oil used to price many oil cargoes and serves as an indicator of price trends.
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