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, to average $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 for 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 from last month’s assessment at 3.1% in 2026 and 3.2% in 2027. The US economic growth forecast has been revised slightly up to 2.2% for 2026, while it remains at 2% for 2027. In the Eurozone, the economic growth forecasts are steady at 1.2% for both years. Japan's economic growth forecasts are also unchanged 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 is expected to be 2.0% for 2026 and 2.2% for 2027, while Russia's forecasts are at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to influence these growth trajectories, particularly in 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 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. In 2027, global oil demand is projected to grow by about 1.3 mb/d, y-o-y, with the OECD expected to grow by 0.1 mb/d and the non-OECD by about 1.2 mb/d.

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

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. In the US Gulf Coast, losses were attributed to increased availability of heavy crude supplies, affecting fuel oil and gasoil crack spreads. In Rotterdam, key product margins fell, with gasoline leading the decline. Singapore experienced similar declines 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 levels for the month in over a decade, up by 64%, y-o-y. Suezmax rates rose amid weather disruptions, while Aframax rates also performed strongly, with cross-Med rates reaching a 10-year high. In the clean tanker market, rates increased significantly, particularly on the Middle East-to-East route, which was up by 17%, m-o-m.

Crude & Refined Products Trade Flows

US crude imports averaged 6.3 mb/d in January, consistent with the five-year average. 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. 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 despite a slight decline.

Commercial Stock Movements

Preliminary December 2025 data show OECD commercial oil inventories rose by 6.5 mb, m-o-m, to stand at 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.

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. For 2027, the demand for DoC crude is also unchanged at 43.6 mb/d, reflecting a similar 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, resulting in a healthy buffer. The market balance suggests that production decisions will need to be strategically aligned to meet the projected demand growth while considering the evolving global economic landscape.