Fitch Ratings has published an adverse macroeconomic case risk heat map analysing the exposure of issuers' standalone credit profiles to an alternative, more severe Iran conflict scenario than that outlined in its March 2026 Global Economic Outlook (GEO).
In the GEO, Fitch assumes that oil prices remain at $90-100/bbl through March as the Strait of Hormuz remains effectively closed by the conflict, before falling to $60-70/bbl by 2H2026 in a fundamentally oversupplied market. This translates to an average oil price of $70/bbl in 2026.
Under the adverse scenario, Fitch projects the oil price to rise to an average of $128/bbl in 2Q26 and $100/bbl in 2026. Financial conditions would also be tighter. Fitch assumed US 10-year Treasury yields would increase by 50bp, while spreads would widen by 100bp for US investment-grade corporate bonds, 200bp for high yield corporates, and 100bp for emerging market bond indexes, with global equity prices falling by about 10% compared with a baseline of no oil price shock.
Fitch said, “We do not think that monetary policy in the US, EU or UK would tighten significantly under the scenario. This partly reflects a different inflationary situation compared with the energy price spike in 2022, which occurred against a backdrop of labour shortages, supply chain disruption and massive fiscal stimulus, as well as the market-driven tightening already incorporated. However, policy rates do rise under the scenario in some emerging markets.”
The adverse scenario still assumes limited damage to critical infrastructure in the Gulf, and that attacks by Iran, the US and Israel would cease from 2H2026. The recent damage to Qatar’s Ras Laffan gas facility signals that there are risks to this assumption.