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 increased by $0.71/b, m-o-m, to average $4.47/b. The forward curves for 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, with hedge funds and other money managers significantly 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 remaining at 2% for 2027. The Eurozone's growth forecasts are steady at 1.2% for both years. Japan's economic growth is projected at 0.9% for both 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 economic growth forecasts remain at 2.0% for 2026 and 2.2% for 2027, while Russia's forecasts are steady at 1.3% for 2026 and 1.5% for 2027. Trade normalization and monetary policy impacts are expected to influence these growth trajectories.

World Oil Demand Trends

The global oil demand growth forecast for 2026 remains at 1.4 mb/d, 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 about 1.3 mb/d, y-o-y, with the OECD growing by 0.1 mb/d and non-OECD increasing by around 1.2 mb/d.

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 by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d, according to available secondary sources.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs. Stronger feedstock prices and seasonal demand pressures negatively impacted refining margins, despite increased offline capacity due to severe winter conditions in the Atlantic basin and extended maintenance in Asia.

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 declined, particularly gasoline, followed by fuel oil. Singapore experienced a similar decline driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates started the year strongly in January, supported by weather disruptions, geopolitical uncertainties, and steady loading activity. VLCC spot freight rates surged, with the Middle East-to-East route reaching a decade-high level, up by 64%, y-o-y. Suezmax rates also rose due to weather disruptions and increased demand from European refiners.

Aframax spot freight rates experienced significant gains, with cross-Med rates rising by 10%, m-o-m, to a 10-year high. In the clean tanker market, rates improved, particularly on the Middle East-to-East route, which rose by 17%, m-o-m, while Mediterranean rates increased by 5%, 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 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. Product exports from the US averaged 7.0 mb/d, a decline from elevated levels in previous months.

In Japan, crude imports surged to nearly 3 mb/d in December, 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 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 latest five-year average, but 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 crude oil commercial stocks stood at 1,363 mb, which is 75.5 mb higher, y-o-y, and 17.5 mb above the latest five-year average, but 64.2 mb lower than the 2015–2019 average. 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 for DoC crude is projected at 43.6 mb/d, also reflecting a 0.6 mb/d increase from 2026.

The supply-demand gap analysis indicates a requirement for DoC crude to meet the projected world demand. The gap between world demand and non-DoC supply highlights the necessity for continued production from DoC countries to maintain market balance. Strategic decisions regarding production levels will be crucial to address this gap effectively.