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 widened by $0.71/b, m-o-m, to average $4.47/b.

The forward curves for all major crude benchmarks strengthened, indicating a shift into stronger backwardation for both ICE Brent and NYMEX WTI. This change was supported by oil supply outages, reduced 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 slightly revised up to 2.2% for 2026, while it remains at 2% for 2027. The Eurozone's growth forecasts are steady at 1.2% for both years. Japan is expected to grow at 0.9%, and China's growth forecast remains at 4.5%. India shows a robust outlook with forecasts of 6.6% for 2026 and 6.5% for 2027. Brazil's growth is projected at 2.0% for 2026 and 2.2% for 2027, while Russia's forecasts are 1.3% for 2026 and 1.5% for 2027.

Trade normalization and monetary policy impacts are expected to play significant roles in shaping these economic conditions, influencing oil demand and supply dynamics.

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. For 2027, global oil demand is projected to grow by about 1.3 mb/d, with the OECD contributing an increase of 0.1 mb/d and non-OECD maintaining its growth at about 1.2 mb/d, y-o-y.

Key demand drivers include economic growth in emerging markets, while constraints may arise from geopolitical tensions and potential economic slowdowns in developed regions.

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, with similar increases anticipated. 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 monitoring 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 pressures. The US Gulf Coast (USGC) experienced losses primarily from the bottom section of the barrel, impacted by increased heavy crude supplies. In Rotterdam, all key product margins fell, with gasoline leading the decline. Singapore also saw a decline in margins driven by elevated gasoline and jet/kerosene supplies.

Tanker Market & Freight Dynamics

The dirty tanker spot freight rates had a strong start in January, bolstered by weather disruptions and geopolitical uncertainties. VLCC spot freight rates surged, particularly on the Middle East-to-East route, which reached the highest level for the month in over a decade, up by 64% y-o-y. Suezmax rates also increased due to weather disruptions, while Aframax rates rose significantly, reaching a 10-year high.

In the clean tanker market, spot freight rates showed strong performance, particularly in the East of Suez, with rates on the Middle East-to-East route up by 17%, m-o-m.

Crude & Refined Products Trade Flows

In January, US crude imports averaged 6.3 mb/d, consistent with the five-year average, while exports rose to 4.2 mb/d, driven by higher 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, although product imports declined by 3%. India maintained elevated crude import levels at 5.1 mb/d, despite a slight m-o-m decline.

Product exports from the US decreased to 7.0 mb/d, while China's product exports rose marginally, indicating a complex interplay of supply and demand across regions.

Commercial Stock Movements

Preliminary December 2025 data indicates 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 still 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, 75.5 mb higher y-o-y.

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 an increase of 0.6 mb/d from the previous year.

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 will need to consider these dynamics to maintain market stability and meet projected demand.