Crude Oil Price Movements
In December, the OPEC Reference Basket (ORB) value dropped by $2.72/b, month-on-month (m-o-m), to average $61.74/b. The ICE Brent front-month contract dropped by $2.03/b, m-o-m, to average $61.63/b in December, and the NYMEX WTI front-month contract dropped by $1.61/b, m-o-m, to average $57.87/b. The GME Oman front-month contract dropped by $2.57/b, m-o-m, to average $61.96/b. The Brent–WTI front-month spread dropped by $0.42/b, m-o-m, to average $3.76/b in December. The forward curves of all major crude benchmarks remained in backwardation in December, signalling supportive physical crude market fundamentals and a positive short-term global supply–demand outlook. This is despite persistent selling pressure in futures markets. The forward curves for ICE Brent and GME Oman flattened further in December, m-o-m, while the backwardation in NYMEX WTI strengthened slightly.
World Economy
Global economic growth is forecast at 3.1% in 2026, unchanged from last month’s assessment. This steady expansion is expected to accelerate further in 2027 to reach 3.2%. This positive outlook is underpinned by normalization in global trade, fiscal support measures, and ongoing adjustments to monetary policies in major economies. For the US, the economic growth forecast remains at 2.1% for 2026, while for 2027, it is forecast at 2%. In the Eurozone, the economic growth forecast remains at 1.2% for 2026, with similar growth forecast for 2027. Japan’s economic growth forecast remains at 0.9% for 2026, with similar growth forecast for 2027. China’s economic growth forecast remains unchanged at 4.5% for 2026, and similar growth is forecast for 2027. India’s economic growth forecast remains at 6.6% for 2026, while for 2027, it is forecast at 6.5%. Brazil’s economic growth forecast remains at 2.0% for 2026, and rising to 2.2% in 2027. Russia’s economic growth forecast is revised down slightly to 1.3% for 2026, but is forecast to gain traction in 2027, reaching 1.5%.
World Oil Demand
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 grow by 0.15 mb/d, while the non-OECD is forecast to grow by around 1.2 mb/d. In 2027, global oil demand is forecast to grow by about 1.3 mb/d, y-o-y. The OECD is forecast to grow by 0.1 mb/d next year, while the non-OECD is forecast to grow by around 1.2 mb/d, y-o-y.
World Oil Supply
Non-DoC liquids production (i.e., liquids production from countries not participating in the Declaration of Cooperation) in 2026 is forecast to grow by about 0.6 mb/d, y-o-y, unchanged from last month’s assessment, with Brazil, Canada, the US, and Argentina as the main growth drivers. In 2027, non-DoC liquids production is also forecast to grow by 0.6 mb/d, mainly driven by Brazil, Canada, Qatar, and Argentina. Natural gas liquids (NGLs) and non-conventional liquids from countries participating in the DoC are forecast to grow by 0.1 mb/d, y-o-y, in 2026, to average about 8.8 mb/d, followed by a similar increase in 2027 of about 0.1 mb/d, y-o-y, to average about 8.9 mb/d. Crude oil production by countries participating in the DoC decreased by 238 tb/d in December, m-o-m, to average about 42.83 mb/d, according to available secondary sources.
Product Markets and Refining Operations
Following a sharp upward trend registered in the most recent months, refining margins dropped across all regions in December. In the Northern Hemisphere, the decline was due to product inventory builds, particularly for transport fuels, amid seasonal demand-side pressures. A decline in European product flows to West Africa also contributed to the margins drop. In Southeast Asia, rising domestic product supplies, softening export incentives, and firm product availability from the Middle East also weighed on refining profitability.
Tanker Market
Dirty tanker spot freight rates declined in December, following strong gains seen since mid-year. VLCC spot freight rates experienced a drop but remained at strong levels on continued demand for long-haul flows. Spot freight rates on the Middle East-to-East route declined 12%, m-o-m, and rates on the Middle East-to-West route were down 11%, m-o-m. Suezmax rates saw a similar decline, as reduced tightness in the VLCC market removed some spillover support. Suexmax rates on the US Gulf Coast (USGC) to Europe route fell 12%, m-o-m. Aframax spot freight rates experienced a more moderate decline, as rates had previously faced less upward pressure. Cross-Med Aframax spot freight rates declined 4%, m-o-m. In the clean tanker market, spot freight rates experienced further upward momentum as refineries continued to ramp up following maintenance, increasing long-haul demand. Rates on the Middle East-to-East route rose by 14%, m-o-m, while rates around the Mediterranean were up 6%, m-o-m.
Crude and Refined Product Trade
In December, US crude imports were broadly unchanged from the previous month at just under 6 mb/d. Crude exports increased by almost 10%, m-o-m, in December. US product exports were broadly unchanged in December, m-o-m. In the OECD Europe region, crude imports increased, m-o-m, in November. OECD Europe product imports continued to decline, m-o-m, while product exports jumped to the upper end of the 5-year range. Japan’s crude imports picked up further in November, averaging 2.4 mb/d, supported by regional product demand. Product outflows increased 6%, driven primarily by fuel oil. Meanwhile, China’s crude imports in November jumped to the highest since 2023, averaging 12.4 mb/d, a gain of around 9%, m-o-m, following the release of crude import quotas. China’s product imports showed strength in November, led by naphtha and fuel oil. India’s crude imports remained above the five-year range, averaging 5.1 mb/d in November. Product exports from India increased, supported by higher gasoline and naphtha exports, which offset a further strong decline in diesel outflows.
Commercial Stock Movements
Preliminary November 2025 data show that OECD commercial inventories rose by 4.0 mb, m-o-m, to stand at 2,840 mb. At this level, OECD commercial stocks were 77.6 mb higher than a year earlier and 0.3 mb above the latest five-year average, but 101.5 mb below the 2015–2019 average. Within the components, crude stocks rose by 8.1 mb, while product stocks fell by 4.1 mb, m-o-m. OECD crude oil commercial stocks stood at 1,346 mb. This was 39.1 mb higher than a year ago, but 20.7 mb below the latest five-year average and 104.7 mb lower than the 2015–2019 average. OECD total product stocks stood at 1,494 mb. This was 38.6 mb higher than a year ago, 21.0 mb above the latest five-year average, and 3.2 mb higher than the 2015–2019 average. In terms of days of forward cover, OECD commercial stocks rose by 0.2 days, m-o-m, in November, to stand at 62.2 days. This was 1.5 days higher than in November 2024, but 1.3 days lower than the latest five-year average and unchanged relative to the 2015–2019 average.
Balance of Supply and Demand
Demand for DoC crude (i.e., crude from countries participating in the DoC) in 2026 remains unchanged from the previous month’s assessment of 43.0 mb/d, which is about 0.6 mb/d higher than that of 2025. For 2027, demand for DoC crude is forecast to reach 43.6 mb/d, around 0.6 mb/d higher than the 2026 forecast.