Brent crude to fall to an average US$81 per barrel in 2027 – Fitch Solutions

Brent crude is expected to fall from an average of US$83 per barrel (/bbl) in 2026 to US$81/bbl in 2027, as the Strait of Hormuz reopens and Middle East production normalizes, while OPEC+ will likely unwind its remaining production cuts in full. According to Fitch Solutions, these dynamics will push global supply above demand – even accounting for global restocking needs – lowering prices through the year. In its latest article “Sub-Saharan Africa Weathers US-Iran Price Shock Due To FX Resilience, But 2027 Risks Are Building”, the UK-based firm said this will force headline inflation across most SSA markets to ease gradually in 2027. “Falling fuel prices will ease transport costs across SSA [Sub-Saharan Africa], generating disinflationary second-round effects. In line with this, we expect that the vast majority of SSA central banks will resume monetary easing in 2027, including those in South Africa, Nigeria and Kenya”. It added that inflationary pressures remain contained despite US-Iran conflict. Crucially, it said the increase in inflation has been far smaller than during the previous energy price shock in 2022. “When Russia invaded Ukraine in February 2022, regional inflation jumped by 3.2pp [percentage points] in the first five months of the conflict, more than double the rise seen following the outbreak of the 2026 US-Iran conflict, despite comparable moves in global energy benchmarks”. It continued that the relatively muted inflationary impact this time largely reflects greater FX [foreign exchange] stability across SSA – rather than greater fiscal intervention – underpinned by positive real rates that have sustained demand for regional assets, alongside elevated prices for SSA’s key commodities, including gold, copper, aluminium, coffee and cocoa. As a result of adequate foreign exchange liquidity, Fitch Solutions alluded to the fact that SSA has avoided a sharp rise in imported price pressures, which tend to have an outsized impact on headline inflation given the region’s shallow manufacturing base. Brent crude is presently going for US$114.6 per barrel on the world market.