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 of all major crude benchmarks strengthened, with 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, as hedge funds and other money managers significantly increased their net long positions.

World Economy & Macroeconomic Backdrop

The global economic growth forecasts remain stable, projected 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 remaining at 2% for 2027. The Eurozone's growth forecasts are steady at 1.2% for both years. Japan's growth is expected to be 0.9% for 2026 and 2027. China's growth forecast remains at 4.5% for both years, while India's is projected at 6.6% for 2026 and 6.5% for 2027. Brazil's growth is forecasted at 2.0% for 2026 and 2.2% for 2027, and Russia's at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to influence these growth rates, contributing to a stable economic environment for oil demand.

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 the non-OECD is projected 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 growing by 0.1 mb/d and the non-OECD increasing by approximately 1.2 mb/d.

Key demand drivers include economic growth in emerging markets, while constraints may arise from shifts in energy policies and technological advancements in alternative energy sources.

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, reaching an average of about 8.8 mb/d in 2026 and 8.9 mb/d in 2027. In January, crude oil production from DoC countries decreased by 439 tb/d, m-o-m, averaging about 42.45 mb/d.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs, impacted by stronger feedstock prices and seasonal demand pressures. In the US Gulf Coast (USGC), 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 experiencing the largest decline. Singapore saw a similar trend, driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a strong start in January, driven by weather disruptions, geopolitical uncertainties, and steady loading activity. VLCC spot freight rates reached their highest levels in a decade, up by 64% y-o-y. Suezmax rates also rose due to weather disruptions, while Aframax rates experienced a strong performance, reaching a 10-year high. In the clean tanker market, spot freight rates increased, particularly on the Middle East-to-East route, which rose by 17%, m-o-m.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, consistent with the five-year average, while exports rose by almost 0.2 mb/d to 4.2 mb/d. In OECD Europe, crude imports declined due to lower flows from Kazakhstan, but product exports increased. Japan's crude imports surged to nearly 3 mb/d, the highest since March 2020, while China's crude imports hit a record high of 13.2 mb/d. 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, 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. OECD crude oil commercial stocks stood at 1,363 mb, 75.5 mb higher y-o-y. Days of forward cover increased 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. The demand for DoC crude in 2027 is also unchanged at 43.6 mb/d, reflecting a similar increase. The following table summarizes the supply-demand balance for the upcoming years:

The analysis indicates a supply-demand gap that necessitates strategic production decisions moving forward. The DoC requirement highlights the need for continued cooperation among member countries to meet projected demand levels effectively.