Crude Oil Radar

OPEC Market Analysis

Crude Oil Price Movements

In January, the OPEC Reference Basket (ORB) value rose by $0.61/b, month-on-month (m-o-m), to average $62.31/b. The ICE Brent front-month contract increased by $3.10/b, m-o-m, to average $64.73/b, while the NYMEX WTI front-month contract rose by $2.39/b, m-o-m, to average $60.26/b. The GME Oman front-month contract also saw an increase of $0.83/b, m-o-m, averaging $62.79/b.

The Brent–WTI front-month spread rose by $0.71/b, m-o-m, to average $4.47/b. The forward curves for all major crude benchmarks strengthened, with the front end of the curves for both ICE Brent and NYMEX WTI moving into stronger backwardation. This shift was supported by oil supply outages, easing selling pressure from speculators, and robust physical market fundamentals. The forward curve for GME Oman remained relatively unchanged, m-o-m. Speculative sentiment turned bullish, with hedge funds and other money managers sharply increasing their net long positions.

World Economy & Macroeconomic Backdrop

The global economic growth forecasts remain unchanged from last month’s assessment at 3.1% in 2026 and 3.2% in 2027. The US economic growth forecast has been revised slightly up to 2.2% for 2026, while it remains at 2% for 2027. The Eurozone's economic growth forecasts are stable at 1.2% for both years. Japan's growth forecasts are also unchanged at 0.9% for both years. China's economic growth is forecasted at 4.5% for both 2026 and 2027, while India's growth is projected at 6.6% for 2026 and 6.5% for 2027. Brazil's economic growth is expected to be 2.0% for 2026 and 2.2% for 2027, while Russia's growth forecasts remain at 1.3% for 2026 and 1.5% for 2027.

World Oil Demand Trends

The global oil demand growth forecast for 2026 remains at 1.4 mb/d, year-on-year (y-o-y), unchanged from last month’s assessment. The OECD is forecast to increase by 0.15 mb/d, while the non-OECD is expected to grow by about 1.2 mb/d. In 2027, global oil demand is forecast to grow by about 1.3 mb/d, y-o-y, with the OECD projected to grow by 0.1 mb/d and the non-OECD expected to increase by about 1.2 mb/d, y-o-y.

World Oil Supply Analysis

Non-DoC liquids production is forecast to grow by about 0.6 mb/d, y-o-y, in 2026, driven primarily by Brazil, Canada, the US, and Argentina. This growth is expected to continue into 2027. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are forecast to grow by 0.1 mb/d, y-o-y, in 2026, averaging about 8.8 mb/d, with similar growth anticipated in 2027. In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs. Stronger feedstock prices and seasonal demand pressures negatively impacted refining margins, despite a significant rise in offline capacity due to severe winter conditions in the Atlantic basin and extended maintenance in Asia. In the US Gulf Coast, losses were primarily driven by increased availability of heavy crude supplies affecting fuel oil and gasoil crack spreads. In Rotterdam, all key product margins declined, with gasoline leading the drop. Singapore experienced similar declines due to elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates had a strong start in January, supported by weather disruptions, geopolitical uncertainties, and steady loading activity. VLCC spot freight rates reached the highest level for the month in at least a decade, up by 64%, y-o-y. Suezmax rates increased amid weather disruptions, with rates on the USGC-to-Europe route up by 12%, m-o-m. Aframax spot freight rates also performed well, with cross-Med rates rising by 10%, m-o-m, to a 10-year high. In the clean tanker market, rates showed strong performance, particularly on the Middle East-to-East route, which rose by 17%, m-o-m.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, aligning with the latest five-year average. Crude exports rose by almost 0.2 mb/d, m-o-m, to average 4.2 mb/d, driven by higher flows to Europe and Africa. Product exports from the US averaged 7.0 mb/d, down from elevated levels in previous months. In Japan, crude imports surged to just under 3 mb/d in December, the highest since March 2020. China's crude imports reached a record high of 13.2 mb/d in December, while product imports declined by 3%. India's crude imports remained elevated at 5.1 mb/d, despite a slight m-o-m decline.

Commercial Stock Movements

Preliminary December 2025 data show that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 2,845 mb. At this level, OECD commercial stocks were 89.9 mb higher, y-o-y, and 44.1 mb above the latest five-year average, but 81.0 mb below the 2015–2019 average. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb, m-o-m. OECD crude oil commercial stocks stood at 1,363 mb, 75.5 mb higher, y-o-y, and 17.5 mb above the latest five-year average. In terms of days of forward cover, OECD commercial stocks rose by 0.7 days, m-o-m, to stand at 62.8 days.

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 that of 2025. For 2027, the demand for DoC crude is projected at 43.6 mb/d, also reflecting a 0.6 mb/d increase. The following table summarizes the supply-demand balance for the upcoming years:

The analysis indicates a supply-demand gap, with the DoC requirement for 2026 at 43.0 mb/d against a world demand of 106.5 mb/d and non-DoC supply of 63.5 mb/d. This gap necessitates strategic production decisions to ensure market stability.