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, averaging $4.47/b. The forward curves for all major crude benchmarks strengthened, with ICE Brent and NYMEX WTI moving into stronger backwardation. This 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 stable at 3.1% for 2026 and 3.2% for 2027. The US economic growth forecast has been revised slightly upward to 2.2% for 2026, while it remains at 2% for 2027. The Eurozone's growth forecasts are unchanged at 1.2% for both years. Japan's growth is projected at 0.9% for 2026 and 2027. China's growth forecast remains at 4.5% for both years, while India's is at 6.6% for 2026 and 6.5% for 2027. Brazil's growth is forecast at 2.0% for 2026 and 2.2% for 2027, with Russia's growth at 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to play a significant role in shaping these economic forecasts.

World Oil Demand Trends

The global oil demand growth forecast for 2026 is projected at 1.4 mb/d, y-o-y, consistent with previous assessments. The OECD is expected to see an increase of 0.15 mb/d, while the non-OECD is forecast to grow by approximately 1.2 mb/d. In 2027, global oil demand is anticipated 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 growth in emerging 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 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, in 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 according to available secondary sources.

Product Markets & Refining Operations

In January, refining margins declined across all reported trading hubs. Increased feedstock prices and seasonal demand pressures negatively impacted refining margins, despite a rise in offline capacity due to severe winter conditions in the Atlantic basin and extended maintenance in Asia.

In the US Gulf Coast, losses were driven by the bottom section of the barrel, with heavy crude supplies affecting fuel oil and gasoil crack spreads. In Rotterdam, all key product margins fell, particularly gasoline. Singapore also experienced declines due to elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

Dirty tanker spot freight rates had a robust start in January, bolstered by weather disruptions, geopolitical uncertainties, and steady loading activity. VLCC spot freight rates surged, with the Middle East-to-East route reaching the highest level in a decade, up by 64%, y-o-y. Suezmax rates also rose due to weather disruptions and increased demand from European refiners. Aframax rates experienced strong performance, with cross-Med rates rising by 10%, m-o-m, to a 10-year high.

In the clean tanker market, spot freight rates increased significantly, led by East of Suez, with rates on the Middle East-to-East route 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. Product exports from the US averaged 7.0 mb/d, down from elevated levels in previous months.

In Japan, crude imports surged to just under 3 mb/d in December, 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, m-o-m.

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. The days of forward cover for OECD commercial stocks rose by 0.7 days, m-o-m, to 62.8 days.

Supply-Demand Balance & Market Outlook

The demand for DoC crude in 2026 is projected at 43.0 mb/d, which is about 0.6 mb/d higher than in 2025. For 2027, the demand remains at 43.6 mb/d, also reflecting an increase of 0.6 mb/d from the previous year.

The following table summarizes the supply-demand balance for 2026 and 2027:

The analysis indicates a supply-demand gap for DoC crude, highlighting the need for strategic production decisions moving forward. The projected demand for 2026 is 106.5 mb/d, while non-DoC supply is estimated at 63.5 mb/d, leading to a DoC requirement of 43.0 mb/d. This gap emphasizes the importance of maintaining production levels to meet future demand.