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, rising by $0.83/b, m-o-m, to average $62.79/b. The Brent–WTI front-month spread widened by $0.71/b, m-o-m, averaging $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. 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 stable 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, and Japan's forecast remains at 0.9%. China's growth is projected at 4.5%, and India is expected to grow at 6.6% in 2026 and 6.5% in 2027. Brazil's growth forecast is stable at 2.0% for 2026 and 2.2% for 2027, while Russia's growth is expected to be 1.3% in 2026 and 1.5% in 2027.

The normalization of trade and adjustments in monetary policy are anticipated to influence these growth trajectories positively.

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 forecast to grow by approximately 1.2 mb/d. In 2027, global oil demand is projected to grow by about 1.3 mb/d, 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 shifts in energy policies and efficiency improvements.

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 in 2026 and 2027. In January, crude oil production by 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 due to stronger feedstock prices and seasonal demand pressures. In the US Gulf Coast, losses were noted in the bottom section of the barrel, while 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 saw a significant increase, with rates on the Middle East-to-East route rising by 64%, y-o-y. Suezmax rates also rose, particularly on the USGC-to-Europe route, which increased by 12%, m-o-m. Aframax spot freight rates reached a 10-year high, reflecting strong demand.

In the clean tanker market, rates on the Middle East-to-East route were up by 17%, m-o-m, while rates around the Mediterranean gained 5%, m-o-m.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, aligning 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. 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 data show 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. 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 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 is projected at 43.6 mb/d, also reflecting a 0.6 mb/d increase.

The analysis indicates a supply-demand gap for DoC crude, with a requirement of 43.0 mb/d in 2026 against a non-DoC supply of 63.5 mb/d, suggesting a healthy buffer. The strategic outlook for production decisions remains focused on maintaining balance in the market, considering the projected demand growth and supply capabilities.