Crude Oil Radar

OPEC Market Analysis

Crude Oil Price Movements

In December, the OPEC Reference Basket (ORB) value dropped by $2.72/b, month-on-month (m-o-m), to average $61.74/b. The ICE Brent front-month contract decreased by $2.03/b, m-o-m, to average $61.63/b, while the NYMEX WTI front-month contract fell by $1.61/b, m-o-m, to average $57.87/b. The GME Oman front-month contract also saw a decline of $2.57/b, m-o-m, averaging $61.96/b. The Brent–WTI front-month spread narrowed by $0.42/b, m-o-m, to average $3.76/b in December.

The forward curves for all major crude benchmarks remained in backwardation, indicating supportive physical crude market fundamentals and a positive short-term global supply-demand outlook, despite ongoing selling pressure in futures markets. Notably, the forward curves for ICE Brent and GME Oman flattened further, while the backwardation in NYMEX WTI strengthened slightly.

World Economy & Macroeconomic Backdrop

Global economic growth is forecast at 3.1% in 2026, unchanged from last month’s assessment, with an expected acceleration to 3.2% in 2027. This positive outlook is supported by:

• Normalization in global trade
• Fiscal support measures
• Adjustments to monetary policies in major economies

Specific growth forecasts include:

• US: 2.1% in 2026, 2.0% in 2027
• Eurozone: 1.2% for both 2026 and 2027
• Japan: 0.9% for both 2026 and 2027
• China: 4.5% for both 2026 and 2027
• India: 6.6% in 2026, 6.5% in 2027
• Brazil: 2.0% in 2026, rising to 2.2% in 2027
• Russia: 1.3% in 2026, forecasted to increase to 1.5% in 2027

World Oil Demand Trends

The global oil demand growth forecast for 2026 remains at 1.4 mb/d, y-o-y, with the OECD expected to grow by 0.15 mb/d and the non-OECD by approximately 1.2 mb/d. For 2027, global oil demand is projected to grow by about 1.3 mb/d, with the OECD growing by 0.1 mb/d and the non-OECD by around 1.2 mb/d.

World Oil Supply Analysis

Non-DoC liquids production is forecast to grow by about 0.6 mb/d, y-o-y, in both 2026 and 2027, primarily driven by Brazil, Canada, the US, and Argentina. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are expected to increase by 0.1 mb/d, reaching an average of 8.8 mb/d in 2026 and 8.9 mb/d in 2027. However, crude oil production by DoC countries decreased by 238 tb/d in December, averaging about 42.83 mb/d.

Product Markets & Refining Operations

Refining margins experienced a decline across all regions in December, following a sharp upward trend in previous months. Key factors included:

• Product inventory builds, particularly for transport fuels
• Seasonal demand-side pressures
• Decline in European product flows to West Africa

In Southeast Asia, increased domestic product supplies and firm product availability from the Middle East also contributed to reduced refining profitability.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates fell in December after strong gains earlier in the year. Key movements include:

• VLCC spot freight rates declined but remained strong due to continued long-haul demand
• Spot freight rates on the Middle East-to-East route dropped by 12%, while the Middle East-to-West route fell by 11%
• Suezmax rates decreased by 12% on the US Gulf Coast to Europe route
• Aframax rates saw a more moderate decline of 4% on the Cross-Med route

In the clean tanker market, rates increased as refineries ramped up operations post-maintenance, with rates on the Middle East-to-East route rising by 14%.

Crude & Refined Products Trade Flows

In December, US crude imports remained stable at just under 6 mb/d, while exports increased by nearly 10%, m-o-m. Key regional trade patterns include:

• OECD Europe saw an increase in crude imports and a decline in product imports, with product exports reaching the upper end of the 5-year range
• Japan's crude imports rose to 2.4 mb/d, supported by regional demand
• China's crude imports surged to 12.4 mb/d, a 9% m-o-m increase, following the release of import quotas
• India's crude imports remained above the five-year range at 5.1 mb/d

Commercial Stock Movements

Preliminary data for November 2025 indicates that OECD commercial inventories rose by 4.0 mb, m-o-m, to 2,840 mb. This level is:

• 77.6 mb higher than a year earlier
• 0.3 mb above the latest five-year average
• 101.5 mb below the 2015–2019 average

Crude stocks increased by 8.1 mb, while product stocks fell by 4.1 mb, with total OECD crude oil commercial stocks at 1,346 mb.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 remains at 43.0 mb/d, which is about 0.6 mb/d higher than in 2025. For 2027, demand is forecast to reach 43.6 mb/d, an increase of 0.6 mb/d from 2026.

The supply-demand gap analysis shows:

The analysis indicates a consistent demand for DoC crude, with a significant supply-demand gap that necessitates strategic production decisions moving forward.