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, to average $62.79/b. The Brent–WTI front-month spread increased by $0.71/b, m-o-m, to average $4.47/b.

The forward curves of 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 at 3.1% for 2026 and 3.2% for 2027. The US economic growth forecast has been slightly revised up to 2.2% for 2026, while it remains at 2% for 2027. The Eurozone's growth forecast is steady at 1.2% for both years. Japan's growth forecast remains at 0.9%, while China's forecast is stable at 4.5%. India's economic growth is projected at 6.6% for 2026 and 6.5% for 2027. Brazil's growth remains at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is forecasted at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to play significant roles in shaping these economic forecasts.

World Oil Demand Trends

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

Key demand drivers include economic growth in emerging markets, while constraints may arise from geopolitical tensions and shifts in energy policies.

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 projected to grow by 0.1 mb/d, y-o-y, in both 2026 and 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 due to stronger feedstock prices and seasonal demand pressures. In the US Gulf Coast, losses were noted in the bottom section of the barrel, while in Rotterdam, all key product margins decreased, led by gasoline. Singapore also experienced a decline in margins driven by 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 and geopolitical uncertainties. VLCC spot freight rates reached the highest level for the month in at least a decade, increasing by 64% y-o-y. Suezmax rates rose amid weather disruptions, while Aframax rates also performed strongly, reaching a 10-year high for the month. In the clean tanker market, rates were up by 17% m-o-m on the Middle East-to-East route.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, consistent with the five-year average, while exports rose to 4.2 mb/d. In OECD Europe, crude imports declined due to lower flows from Kazakhstan. Japan's crude imports surged to just under 3 mb/d, the highest since March 2020. China's crude imports reached a record high of 13.2 mb/d, while India's crude imports remained elevated at 5.1 mb/d.

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. This level is 89.9 mb higher y-o-y and 44.1 mb above the latest five-year average. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb. Days of forward cover rose by 0.7 days, m-o-m, to 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 in 2025. For 2027, the demand remains at 43.6 mb/d, also reflecting a 0.6 mb/d increase over 2026. The world oil demand for 2026 is projected at 106.5 mb/d, while non-DoC liquids production is forecasted at 63.5 mb/d, leading to a DoC requirement gap of 43.0 mb/d.

The strategic outlook for production decisions must consider this supply-demand gap, as it highlights the necessity for DoC countries to adjust their output to meet the anticipated demand.