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 saw a rise 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 of 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. 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 stable at 1.2% for both years. Japan's growth remains at 0.9%, and China's forecast is steady at 4.5%. India's growth is projected at 6.6% for 2026 and 6.5% for 2027. Brazil's growth is expected at 2.0% for 2026 and 2.2% for 2027, while Russia's growth forecasts are at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are anticipated to influence these growth trajectories, with a focus on the recovery patterns across major economies.

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 the non-OECD is projected to grow by approximately 1.2 mb/d. For 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 about 1.2 mb/d.

Key demand drivers include economic recovery in emerging markets and ongoing industrial activity, while constraints may arise from geopolitical tensions and environmental policies.

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 grow by 0.1 mb/d, y-o-y, in both 2026 and 2027. In January, crude oil production by DoC countries decreased by 439 tb/d, m-o-m, to average about 42.45 mb/d.

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 also saw a decline in margins driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

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 level in a decade, up by 64% y-o-y. Suezmax rates also rose amid weather disruptions, while Aframax spot freight rates experienced significant gains, reaching a 10-year high for the month. In the clean tanker market, rates showed strong performance, particularly on the Middle East-to-East route.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, consistent with the five-year average. US crude exports rose by nearly 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 just under 3 mb/d, 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 latest five-year 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, 75.5 mb higher y-o-y, while total product stocks were at 1,481 mb, 14.4 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 in 2025. For 2027, the demand is projected at 43.6 mb/d, also reflecting an increase of 0.6 mb/d compared to 2026. The supply-demand balance indicates a significant gap between world demand and non-DoC supply.

The analysis indicates a DoC requirement gap, highlighting the need for strategic production decisions to ensure market balance.