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. 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 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 forecast is steady at 1.2% for both years. Japan's forecast remains at 0.9%, and China's growth is projected at 4.5%. India is expected to grow by 6.6% in 2026 and 6.5% in 2027. Brazil's economic growth is forecasted at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is projected at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and the impacts of monetary policy will continue to shape the global economic landscape, influencing oil demand and supply dynamics.

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 forecast to grow by approximately 1.2 mb/d. For 2027, global oil demand is projected to grow by about 1.3 mb/d, y-o-y, with the OECD growing by 0.1 mb/d and the non-OECD by about 1.2 mb/d.

Key demand drivers include economic recovery in major economies, 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 both 2026 and 2027, primarily driven by Brazil, Canada, the US, and Argentina. Natural gas liquids (NGLs) and non-conventional liquids from DoC countries are expected 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, 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. In the US Gulf Coast, losses were attributed to increased availability of heavy crude supplies. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore experienced a similar trend, 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 the highest level for the month in at least a decade, up by 64% y-o-y. Suezmax rates rose amid weather disruptions, while Aframax rates also performed strongly, reaching a 10-year high. In the clean tanker market, rates were led by East of Suez, with notable increases in 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. Crude exports rose to 4.2 mb/d, driven by higher flows to Europe and Africa. In Japan, crude imports surged to just under 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 2,845 mb. This level is 89.9 mb higher y-o-y and 44.1 mb above the 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.

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 also remains at 43.6 mb/d, reflecting similar growth. The following table summarizes the supply-demand balance for 2026 and 2027:

The supply-demand gap analysis indicates a requirement for DoC crude to meet the increasing global demand, highlighting the strategic importance of production decisions moving forward.