Fitch Raises Oil Forecasts but Sees Global Growth Holding Steady for Now

By Fabiana Negrin Ochoa

Global economic growth should be steady this year, if the current oil price shock doesn't last, Fitch Ratings analysts said in their latest outlook report.

Should oil prices rise to $100 a barrel and stay there, that would be a significant global supply shock, said Brian Coulton, chief economist at Fitch.

That scenario would lower world gross domestic product by 0.4% after four quarters, and add up to 1.5 percentage points to inflation in Europe and the U.S., according to Fitch.

Energy prices have been swinging wildly since the conflict in the Middle East broke out in late February. On Thursday, Brent touched the $100-a-barrel mark again, despite the International Energy Agency announcing plans to release strategic reserves in a bid to tame prices.

In a report Wednesday, Fitch raised its near-term oil and gas price forecasts to reflect the effective closure of the Strait of Hormuz, a key shipping route linking Middle East production to the rest of the world.

While prices should drop back to levels driven by market fundamentals once the strait reopens, the ratings company said it is unclear how long the disruptions will last. It noted that the geopolitical risk premium is sizable.

Fitch's view is that the closure of the strait will be short-lived, as the shipping lane's economic importance provides a strong incentive to de-escalate.

The global oil market was also oversupplied before the conflict, which could help cushion against price increases, it said.

"Total global inventories stood at 8.2 billion barrels at end-2025...sufficient to cover a halt in oil shipments via the Strait of Hormuz for over 400 days," Fitch said.

Fitch's baseline is that oil will stay in the $90-$100 range through March before falling to the mid-$60s by the second half of the year. That implies an annual average price of $70 in 2026, up from $63 in the December outlook, but not enough to have a material impact on global growth, inflation or monetary policy.

For now, Fitch expects only a slight slowdown in global economic growth to 2.6% this year. That would compare with 2.7% in 2025, and the 2.4% it predicted in December.

Among major economies, it expects U.S. growth to be flat at 2.2% as weaker consumer spending is offset by a widening fiscal deficit.

It projects eurozone growth at 1.3% versus 1.4% last year. Energy prices are a new headwind, but underlying growth trends are improving as Germany starts to recover.

China's growth is forecast to cool to 4.3% from 5% last year as consumer spending weakens and export growth wanes, though Fitch does see a mild recovery in capital expenditure.

Write to Fabiana Negrin Ochoa at fabiana.negrinochoa@wsj.com

(END) Dow Jones Newswires

March 12, 2026 00:19 ET (04:19 GMT)