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S&P Reaffirms Oil Price Outlook to 2029
Standard & Poor's maintains its oil price forecasts through 2029 despite geopolitical tensions and the suspension of navigation in the Strait of Hormuz and the Bab el-Mandeb Strait. The credit rating agency reaffirmed its expectations for Brent and West Texas Intermediate crude prices, continuing to predict that shipping activity and energy flows will remain below pre-war levels until the end of 2026. The agency noted that the suspension of navigation in the Strait of Hormuz lasted over four months, leading to sharp price fluctuations, with Brent crude rising to $137. This increase was attributed to tensions and attacks on oil tankers in the straits, prompting Saudi Arabia to hedge by utilizing an alternative route through the Bab el-Mandeb Strait. The agency also warned of rising transportation costs and the potential targeting of Saudi refineries, emphasizing that China's return to heavy oil purchases could push prices higher again.
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