Fitch Ratings' Huang Xiaoting: The trend of rising international oil price levels is clear, but the domestic price transmission remains relatively moderate

Under the refined oil price management mechanism, the transmission speed and extent of international oil prices to domestic residents are generally moderate, which helps buffer the impact on residents’ purchasing power. In contrast, price transmission at the industrial end is more market-oriented. With weakening terminal demand, mid- and downstream enterprises may find it difficult to fully pass on increased costs, putting pressure on their profitability. Fitch Ratings conducted scenario analysis on oil price trends in the early stages of the conflict: if the conflict eases quickly, oil prices are expected to remain around $70 per barrel in 2026; if the Strait of Hormuz experiences a phased blockade lasting about three months, the annual average price may rise to around $100 per barrel; in an extreme scenario where the blockade lasts more than six months, oil prices could climb to $130–$170 per barrel, with the annual average price nearing $120 per barrel. Although the probability of such extreme scenarios is relatively low, energy prices are unlikely to return to their previous low range in the short term.