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, 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 stable, 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 was slightly revised up to 2.2% for 2026, while it remains at 2% for 2027. The Eurozone's growth forecasts are stable at 1.2% for both years, with Japan at 0.9%. China maintains a growth forecast of 4.5%, while India is projected to grow at 6.6% in 2026 and 6.5% in 2027. Brazil's growth is forecasted at 2.0% for 2026 and 2.2% for 2027, while Russia's economy is expected to grow by 1.3% in 2026 and 1.5% in 2027.

Trade normalization and monetary policy impacts are expected to play a significant role in shaping 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 by 1.2 mb/d.

Key demand drivers include economic growth in emerging markets, while constraints may arise from geopolitical tensions and shifts in energy policies.

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 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, averaging about 42.45 mb/d, indicating a need for careful monitoring of production levels.

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) faced losses primarily from the bottom section of the barrel, while in Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore's margins were similarly affected by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a robust start in January, driven by weather disruptions, geopolitical uncertainties, and steady loading activity. VLCC spot freight rates surged by 64% y-o-y on the Middle East-to-East route, reaching the highest level for the month in at least a decade. Suezmax and Aframax rates also experienced significant increases, with Suezmax rates on the USGC-to-Europe route rising by 12%, m-o-m. In the clean tanker market, rates increased by 17%, m-o-m, on the Middle East-to-East route, reflecting strong demand.

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, m-o-m, to 4.2 mb/d. Product exports from the US averaged 7.0 mb/d, down from previous months. In OECD Europe, crude imports declined due to lower flows from Kazakhstan, while Japan saw a surge in crude imports, averaging just under 3 mb/d. China's crude imports reached a record high of 13.2 mb/d, 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 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. The days of forward cover for OECD commercial stocks 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 is projected at 43.0 mb/d, which is about 0.6 mb/d higher than in 2025. For 2027, the demand remains at 43.6 mb/d, reflecting a similar increase. The world oil demand for 2026 is forecasted at 106.5 mb/d, while non-DoC supply is projected at 63.5 mb/d. This results in a requirement gap for DoC crude of 43.0 mb/d.

The analysis indicates a tightening market balance, necessitating strategic production decisions moving forward to address the supply-demand gap effectively.