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. 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% for 2026 and 3.2% for 2027. The US economic growth forecast is revised slightly up to 2.2% for 2026, while remaining at 2% for 2027. The Eurozone's growth forecast remains at 1.2% for both years. Japan's growth is forecasted at 0.9% for both years, while China's remains at 4.5%. India's growth forecasts are 6.6% for 2026 and 6.5% for 2027. Brazil's economic growth is projected at 2.0% for 2026 and 2.2% for 2027, while Russia's forecasts are 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to influence these growth rates, with a focus on maintaining stability in the global economy.

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 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 approximately 1.3 mb/d, y-o-y, with the OECD projected to grow by 0.1 mb/d and the non-OECD by about 1.2 mb/d.

Regional demand distribution patterns indicate that non-OECD countries will continue to drive the majority of demand growth, with key drivers including economic expansion and industrial activity.

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 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, y-o-y, reaching an average of 8.8 mb/d in 2026 and 8.9 mb/d in 2027.

In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, averaging about 42.45 mb/d, reflecting ongoing adjustments in response to market conditions.

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 (USGC) experienced losses primarily from the bottom section of the barrel, while in Rotterdam, all key product margins fell, with gasoline leading the decline. In Singapore, elevated gasoline and jet/kerosene supplies contributed to the margin declines.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a strong start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates reached their highest levels in at least a decade, up by 64%, y-o-y. Suezmax rates also rose amid weather disruptions, while Aframax rates experienced a strong performance, 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 saw a 17% increase, m-o-m.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, consistent with the 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. In Japan, crude imports surged to nearly 3 mb/d, the highest since March 2020. China's crude imports reached a record high of 13.2 mb/d in December, while India's crude imports remained elevated at 5.1 mb/d.

Commercial Stock Movements

Preliminary December 2025 data indicate that OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 2,845 mb. 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 was 75.5 mb higher, y-o-y.

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. The demand for DoC crude in 2027 is projected at 43.6 mb/d, reflecting similar growth.

The analysis shows a significant supply-demand gap, with world demand for 2026 at 106.5 mb/d against non-DoC supply of 63.5 mb/d, indicating a DoC requirement of 43.0 mb/d. This gap highlights the necessity for strategic production decisions to balance the market effectively.