Fitch predicts Strait of Hormuz agreement by early 2027

Fitch Ratings projects that a lasting agreement regarding the Strait of Hormuz will likely be reached in the first quarter of 2027. According to the agency’s baseline scenario, there is a 40% probability of reaching a preliminary agreement by that time.

Despite regional tensions and potential conflicts between the United States and Iran, sovereign credit ratings in the Middle East and North Africa have shown resilience. This stability is supported by rising oil prices, the restoration of petroleum exports, and sufficient fiscal buffers. However, the region faces an imbalanced outlook; while some nations have stabilized, three sovereign states currently hold negative outlooks, the weakest balance seen since late 2021.

Key risks include the disruption of hydrocarbon exports through the Strait of Hormuz, which serves as a vital global energy artery. Qatar, a major liquefied natural gas exporter, has faced outlook pressures due to export limitations caused by maritime disruptions. Additionally, Israel maintains a negative outlook due to rising public debt and the economic impact of ongoing conflict.