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. 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 from last month’s assessment at 3.1% in 2026 and 3.2% in 2027. The US economic growth forecast is revised up slightly to 2.2% for 2026, while remaining at 2% for 2027. The Eurozone's economic growth forecasts remain at 1.2% for both years, and Japan's forecasts are stable at 0.9%. China's growth is projected at 4.5% for both 2026 and 2027, while India's outlook stands at 6.6% for 2026 and 6.5% for 2027. Brazil's economic growth is expected to be 2.0% in 2026 and 2.2% in 2027, with Russia's forecasts 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 remains at 1.4 mb/d, y-o-y, unchanged from last month’s assessment. The OECD is forecast to increase by 0.15 mb/d, while the non-OECD is expected to grow by about 1.2 mb/d. In 2027, global oil demand is forecast to grow by about 1.3 mb/d, y-o-y, with the OECD projected to grow by 0.1 mb/d and the non-OECD by approximately 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 2026, driven primarily 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, 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 attributed to increased availability of heavy crude supplies, impacting fuel oil and gasoil crack spreads. 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 a decade-high for the month, up by 64% y-o-y. Suezmax rates also rose amid weather disruptions, while Aframax rates experienced a strong performance, reaching a 10-year high. In the clean tanker market, rates were bolstered by East of Suez demand, with significant increases noted in both the Middle East-to-East and Mediterranean routes.

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, primarily due to increased flows to Europe and Africa. In Japan, 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 in December, while India's crude imports remained elevated at 5.1 mb/d.

Product imports in India declined by 5%, m-o-m, while product exports were stable at 1.4 mb/d. These trends highlight shifting dynamics in regional trade flows and the implications for global supply chains.

Commercial Stock Movements

Preliminary December 2025 data indicate that 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. Crude stocks fell by 2.1 mb, while product stocks increased by 8.6 mb. Days of forward cover rose by 0.7 days, m-o-m, to 62.8 days, reflecting a stable supply situation.

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 is also unchanged at 43.6 mb/d. The following table summarizes the supply-demand balance for the upcoming years:

The analysis indicates a supply-demand gap for DoC crude, necessitating strategic production decisions to ensure market stability. The outlook suggests a continued need for careful management of production levels to align with demand forecasts.