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, averaging $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 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 from last month’s assessment at 3.1% for 2026 and 3.2% for 2027. The US economic growth forecast is slightly revised up to 2.2% for 2026, remaining at 2% for 2027. The Eurozone growth forecast remains at 1.2% for both years, while Japan's forecast is stable at 0.9%. China's economic growth is projected at 4.5% for both years, and India is expected to grow by 6.6% in 2026 and 6.5% in 2027. Brazil's growth forecast is steady at 2.0% for 2026 and 2.2% for 2027, while Russia's economic growth is forecasted at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to influence these growth trajectories, with varying implications across regions.

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 projected 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 expected 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 around 1.2 mb/d.

Key demand drivers include economic recovery in major 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, 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 from 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 to meet future demand.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs due to stronger feedstock prices and seasonal demand-side pressures. In the US Gulf Coast, losses were driven by increased availability of heavy crude supplies affecting fuel oil and gasoil crack spreads. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore also saw a decline in margins due to elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a robust start in January, supported by weather disruptions and geopolitical uncertainties. VLCC spot freight rates reached a decade-high level, up by 64% y-o-y. Suezmax rates also rose due to weather disruptions and increased demand from European refiners. Aframax rates experienced a strong performance, with cross-Med rates rising by 10%, m-o-m.

In the clean tanker market, spot freight rates showed strong performance, particularly on the Middle East-to-East route, which was up by 17%, 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 crude exports rose by almost 0.2 mb/d to 4.2 mb/d. Product exports decreased to 7.0 mb/d from elevated levels in previous months. In Japan, crude imports surged to nearly 3 mb/d, the highest since March 2020, while product imports reached a four-month high. China's crude imports hit a record high of 13.2 mb/d, although product imports declined by 3%. India's crude imports remained elevated at 5.1 mb/d, with product imports declining by 5%.

Commercial Stock Movements

Preliminary December 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. 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, which is 75.5 mb higher y-o-y. Days of forward cover rose by 0.7 days, m-o-m, to 62.8 days, indicating a stable supply situation relative to demand.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 remains at 43.0 mb/d, projected to increase to 43.6 mb/d in 2027. The following table summarizes the supply-demand balance for the upcoming years:

The analysis indicates a significant supply-demand gap, with the DoC requirement for 2026 at 43.0 mb/d compared to a non-DoC supply of 63.5 mb/d, highlighting the need for strategic production decisions moving forward.