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, transitioning into stronger backwardation for both ICE Brent and NYMEX WTI. This shift was supported by oil supply outages, reduced 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 forecasts remain 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 forecasts are steady at 1.2% for both years, Japan at 0.9%, and China at 4.5%. 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% in 2026 and 2.2% in 2027, while Russia's forecasts remain 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 is projected at 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The OECD is expected to see an increase of 0.15 mb/d, while non-OECD demand is forecast to grow by approximately 1.2 mb/d. For 2027, global oil demand is anticipated to grow by about 1.3 mb/d, with the OECD growing by 0.1 mb/d and non-OECD by about 1.2 mb/d.

Key demand drivers include economic recovery and industrial activity, while constraints may arise from geopolitical tensions and supply chain disruptions.

World Oil Supply Analysis

Non-DoC liquids production is forecast to grow by about 0.6 mb/d, y-o-y, in 2026, primarily driven 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 increase by 0.1 mb/d, y-o-y, in both 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 supply situation.

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 attributed to increased availability of heavy crude supplies affecting fuel oil and gasoil crack spreads. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore also saw a decrease in margins driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates experienced a strong start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates surged, with the Middle East-to-East route reaching the highest level in a decade, up by 64% y-o-y. Suezmax rates also increased due to weather disruptions, while Aframax rates rose significantly, reaching a 10-year high for the month.

In the clean tanker market, spot freight rates showed robust performance, particularly on the Middle East-to-East route, which was 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 almost 0.2 mb/d to 4.2 mb/d, driven by higher flows to Europe and Africa. Product exports from the US averaged 7.0 mb/d, a decrease from previous months. In Japan, crude imports surged to nearly 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, while India's crude imports remained elevated at 5.1 mb/d despite a slight decline.

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. This level is 89.9 mb higher y-o-y and 44.1 mb above the five-year average, although 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 commercial stocks now stand at 62.8 days of forward cover, reflecting a slight increase of 0.7 days, m-o-m.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 is projected at 43.0 mb/d, which is about 0.6 mb/d higher than that of 2025. For 2027, the demand remains at 43.6 mb/d, also reflecting a 0.6 mb/d increase.

The analysis indicates a supply-demand gap for DoC crude, with a requirement of 43.0 mb/d in 2026 against a non-DoC supply of 63.5 mb/d, highlighting the need for strategic production decisions moving forward.