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 rose by $0.71/b, m-o-m, to average $4.47/b. The forward curves of all major crude benchmarks strengthened, indicating a shift into stronger backwardation for both ICE Brent and NYMEX WTI. This 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 significantly increasing their net long positions.

World Economy & Macroeconomic Backdrop

The global economic growth forecast remains stable 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 is also unchanged at 0.9% for 2026 and 2027.

China maintains a growth forecast of 4.5% for both years, while India is projected to grow at 6.6% in 2026 and 6.5% in 2027. Brazil's economic growth is forecasted at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is expected to be 1.3% in 2026 and 1.5% in 2027. Trade normalization and monetary policy adjustments are anticipated to impact these forecasts positively.

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 the previous assessment. The OECD is expected to increase by +0.15 mb/d, while non-OECD demand is projected to grow by approximately +1.2 mb/d. In 2027, global oil demand is forecast to grow by +1.3 mb/d y-o-y, with the OECD expected to grow by +0.1 mb/d and non-OECD by +1.2 mb/d.

Regional demand distribution patterns indicate that non-OECD countries will continue to drive the bulk of demand growth, supported by economic expansion and increased energy needs.

World Oil Supply Analysis

Non-DoC liquids production is forecast to grow by +0.6 mb/d y-o-y in 2026, primarily driven by Brazil, Canada, the US, and Argentina. This trend is expected to continue into 2027, with similar growth anticipated. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are projected to grow by +0.1 mb/d in 2026 and 2027.

In January, crude oil production from DoC countries decreased by 439 tb/d m-o-m, averaging about 42.45 mb/d, indicating a tightening in supply from these nations.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs due to stronger feedstock prices and seasonal demand pressures. The US Gulf Coast experienced losses primarily from the bottom section of the barrel, while Rotterdam and Singapore saw declines in key product margins, particularly gasoline and fuel oil.

Seasonal demand pressures and extended maintenance in Asia contributed to these declines, highlighting the challenges faced by refiners in maintaining profitability amid fluctuating input costs.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a robust start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates surged, particularly on the Middle East-to-East route, which reached a decade-high increase of +64% y-o-y. Suezmax rates also rose due to weather disruptions, while Aframax rates experienced strong performance, reaching a 10-year high for the month.

In the clean tanker market, rates showed strong performance, particularly in the East of Suez, with rates on the Middle East-to-East route up by +17% m-o-m.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, aligning with the five-year average, while exports rose by nearly +0.2 mb/d m-o-m to average 4.2 mb/d. Product exports from the US averaged 7.0 mb/d, reflecting a decline from elevated previous levels.

In Japan, crude imports surged to just under 3 mb/d, the highest since March 2020, while product imports reached a four-month high. China's crude imports hit a record high of 13.2 mb/d in December, although product imports declined by -3%. India's crude imports remained elevated at 5.1 mb/d, with product imports down by -5% m-o-m.

Commercial Stock Movements

Preliminary December 2025 data indicate that OECD commercial oil inventories rose by +6.5 mb m-o-m to 2,845 mb, which is +89.9 mb higher y-o-y and +44.1 mb above the five-year 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, which is +75.5 mb higher y-o-y. The days of forward cover rose by +0.7 days m-o-m to 62.8 days, indicating a stable supply situation.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 remains at 43.0 mb/d, which is +0.6 mb/d higher than in 2025. For 2027, the demand is projected at 43.6 mb/d, also +0.6 mb/d higher than 2026.

The supply-demand gap analysis indicates that in 2026, the world demand of 106.5 mb/d exceeds the non-DoC supply of 63.5 mb/d, resulting in a DoC requirement of 43.0 mb/d. This gap highlights the necessity for OPEC and its partners to adjust production strategies to meet the anticipated demand effectively.