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Fitch's Quiet Oil Revolution: Why Cheaper Crude Matters More Than You Think
(MENAFN- The Rio Times) Key Points
Fitch Ratings has sent a clear signal to oil markets: the era of permanently tight supply and sky-high prices looks over.
The agency has cut its“price deck” for Brent crude to about 69 dollars per barrel in 2025 and 63 dollars in 2026 and 2027, with US benchmark WTI slipping to the high-50s later in the decade.
These are the numbers Fitch uses to judge whether oil companies and energy-hungry industries can service their debts. Behind that adjustment sits a simple story.
On the supply side, the United States, Canada, Brazil, Guyana and Argentina are adding millions of barrels a day. Technology has made drilling cheaper and faster, and investors now demand efficiency instead of vague growth promises.
On the demand side, the world is still using more oil each year, but only slowly. Fitch sees consumption rising by around 800,000 barrels per day in both 2025 and 2026, held back by weak petrochemicals and the spread of electric vehicles.
OPEC+ is no longer the only actor that matters. The cartel is easing some of its earlier production cuts, but it must now compete with flexible producers who can ramp up output when prices rise.
Russia adds drama but not clarity: sanctions on Rosneft and Lukoil could trim exports or force deeper discounts, yet Moscow has so far kept barrels flowing.
For expats and foreign investors, the message is straightforward. Oil -importing countries that keep budgets under control and resist using cheap crude as a pretext for new spending can lock in lower inflation, lower interest rates and more predictable planning.
Exporters built on leaner, well-run national oil companies will stay competitive even at 60-dollar oil. Those relying on bloated state giants and easy revenue will find it harder to avoid reforms. In a world of“lower for longer,” competence, not ideology, will decide who thrives.
Fitch now expects oil to hover near the 60–70 dollar range for several years.
Slow demand growth, more electric cars and rising non-OPEC supply are shifting power from producers to importers.
Countries that keep budgets disciplined will cope far better than those betting on endless petrodollars.
Fitch Ratings has sent a clear signal to oil markets: the era of permanently tight supply and sky-high prices looks over.
The agency has cut its“price deck” for Brent crude to about 69 dollars per barrel in 2025 and 63 dollars in 2026 and 2027, with US benchmark WTI slipping to the high-50s later in the decade.
These are the numbers Fitch uses to judge whether oil companies and energy-hungry industries can service their debts. Behind that adjustment sits a simple story.
On the supply side, the United States, Canada, Brazil, Guyana and Argentina are adding millions of barrels a day. Technology has made drilling cheaper and faster, and investors now demand efficiency instead of vague growth promises.
On the demand side, the world is still using more oil each year, but only slowly. Fitch sees consumption rising by around 800,000 barrels per day in both 2025 and 2026, held back by weak petrochemicals and the spread of electric vehicles.
OPEC+ is no longer the only actor that matters. The cartel is easing some of its earlier production cuts, but it must now compete with flexible producers who can ramp up output when prices rise.
Russia adds drama but not clarity: sanctions on Rosneft and Lukoil could trim exports or force deeper discounts, yet Moscow has so far kept barrels flowing.
For expats and foreign investors, the message is straightforward. Oil -importing countries that keep budgets under control and resist using cheap crude as a pretext for new spending can lock in lower inflation, lower interest rates and more predictable planning.
Exporters built on leaner, well-run national oil companies will stay competitive even at 60-dollar oil. Those relying on bloated state giants and easy revenue will find it harder to avoid reforms. In a world of“lower for longer,” competence, not ideology, will decide who thrives.
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