BAKU, Azerbaijan, September 23. Fitch Ratings
has raised its 2027 oil price assumptions and significantly
increased its assumptions for European natural gas prices for 2026
and 2027, citing the impact of the Iran conflict on energy
markets.


According to Fitch’s updated Oil and Gas Price Assumptions, the
agency now expects Brent crude to average $70 per barrel in 2027,
up from its previous assumption of $65/bbl, while its West Texas
Intermediate (WTI) assumption has been increased to $65/bbl from
$60/bbl.


“We have maintained our 2026 Brent price assumption at
USD87/barrel, as year-to-date dynamics have been in line with our
expectations. However, we have raised our 2027 Brent forecast
modestly to USD70/barrel from USD65/barrel to reflect a
geopolitical risk premium. This reflects uncertainty about the
timing of the conflict resolution (our new assumption is during
1Q27) and a risk of further escalation, although likely contained,”
said the rating agency.


The agency also raised its Title Transfer Facility (TTF)
European gas price assumption for 2026 to $17 per thousand cubic
feet (mcf) from $14/mcf and for 2027 to $11/mcf from $9/mcf.


“The increased TTF gas assumptions reflect disruptions to LNG
flows through Hormuz, which accounted for 20% of global LNG supply
before the conflict. EU gas storage is only two-thirds full,
sufficient to avoid supply disruptions during winter but well below
the 80%-90% levels at this time in 2022-2025. Our Henry Hub
assumptions remain unchanged due to limited spare US liquefaction
capacity,” noted Fitch.


Base-case assumptions


Under Fitch’s base case, Brent is now projected at an average of
$87/bbl in 2026, unchanged from the previous forecast, before
declining to $70/bbl in 2027, compared with the previous $65/bbl
assumption.


The agency expects Brent to fall further to $60/bbl in 2028 and
2029, as well as at the mid-cycle level. These longer-term
assumptions are unchanged.


WTI follows a similar trajectory. Fitch maintains its 2026
assumption at $80/bbl, while raising its 2027 forecast to $65/bbl
from $60/bbl. The agency continues to assume a price of $57/bbl for
2028, 2029 and the mid-cycle period.


For comparison, actual average Brent and WTI prices in 2025 were
$68.3/bbl and $64.7/bbl, respectively.


The revised assumptions therefore imply that Fitch expects 2026
Brent prices to be about 27% above the 2025 actual average, while
the new 2027 forecast is about 2.5% higher than the 2025 level. For
WTI, the corresponding increases are about 24% in 2026 and 0.5% in
2027.


European gas assumptions see larger
revision


The most significant changes in percentage terms are in Fitch’s
European gas assumptions.


The agency has raised its 2026 TTF assumption by $3/mcf, or
about 21.4%, from $14/mcf to $17/mcf. For 2027, the forecast has
been increased by $2/mcf, or 22.2%, from $9/mcf to $11/mcf. Despite
these near-term increases, Fitch continues to expect European gas
prices to decline substantially over the following years. The 2028
TTF assumption remains at $7/mcf, followed by $7/mcf in 2029 and
$5/mcf at mid-cycle.







The new 2027 TTF assumption is therefore still around 35% below
Fitch’s revised 2026 level, while the mid-cycle assumption is
around 71% below the 2026 forecast.


For comparison, the actual TTF average in 2025 was $11.9/mcf.
Fitch’s new forecast consequently puts 2026 TTF prices about 43%
above the 2025 level, while the 2027 assumption is around 8% below
the 2025 actual average.


US natural gas assumptions largely unchanged in base
case


Fitch has left its Henry Hub base-case assumptions unchanged.
The agency expects the US benchmark to average $3.50/mcf in both
2025 and 2026, followed by $3.25/mcf in 2027, $3/mcf in 2028 and
$2.75/mcf in 2029 and at mid-cycle.


This represents a more gradual decline than in the European gas
market under Fitch’s assumptions.


Stress case remains considerably lower for
oil


Fitch also published a separate stress case, in which oil and
gas prices are substantially lower over the medium term. Under this
scenario, Brent is assumed at $87/bbl in 2026, before falling to
$45/bbl in 2027 and recovering to $48/bbl in 2028, 2029 and at
mid-cycle.


The WTI assumption follows a similar pattern: $80/bbl in 2026,
$42/bbl in 2027, and $45/bbl in 2028, 2029 and at mid-cycle.
Notably, Fitch’s revisions did not change the stress-case oil
assumptions for 2026–2029 compared with the previous set of
assumptions shown in the table.


Stress-case gas assumptions


The stress case also illustrates a substantial divergence
between US and European gas prices. Fitch has raised its 2026 Henry
Hub assumption to $3.50/mcf from $3/mcf, an increase of 16.7%,
while its 2027 assumption remains at $2.50/mcf.


For 2028, Henry Hub remains at $2.50/mcf, before declining to
$2.25/mcf in 2029 and at mid-cycle.


TTF, meanwhile, is maintained at $17/mcf in 2026 and $5/mcf in
2027 and 2028, before declining to $4.5/mcf at mid-cycle. Thus,
even in Fitch’s stress case, the European gas benchmark is assumed
to remain significantly more elevated in 2026 than in subsequent
years.