Oil's War Premium Could Vanish Fast Once a Hormuz Deal Lands, Analysts Warn

Analysts at Fitch Solutions unit BMI expect a sharp drop in Brent crude once Washington and Tehran reach a preliminary deal over Hormuz, which they see as likeliest in early 2027. Brent is near $114 a barrel, about $20 above JPMorgan’s $94 estimate of fair value; JPMorgan attributes the gap mainly to geopolitical risk rather than freight costs. US Energy Secretary Chris Wright calls the price increase temporary and cites a global refining shortage, while saying large US forces are escorting ships through Hormuz. BMI projects Brent averaging $107 this quarter and $112 in the first quarter of 2027.