The global economy is forecast to maintain robust growth into 2027, with output expected to expand by 3.2%, according to OPEC’s January 2026 Monthly Oil Market Report, underpinning healthy oil demand growth. This marks a modest acceleration from the 3.1% growth forecast for 2026 and reflects a steady expansion across major economies. OPEC said the outlook is supported by continued economic momentum in both OECD and non-OECD countries, alongside normalisation in inflation and global trade. 

Among OECD economies, the US is expected to provide strong momentum to global economic growth in 2027, OPEC said. The Eurozone and Japan are also forecast to experience steady economic expansion. Within the non-OECD, major oil consuming economies including China and India, together with other developing Asian economies, are expected to make a significant contribution to global growth. Brazil and Russia are also projected to sustain steady economic expansion over the forecast period. 

OPEC says inflation is expected to normalise further, providing support for continued adjustments in monetary policies across most major economies. Following major trade agreements, global trade is forecast to gain traction in the near term. However, the organisation cautioned that developments surrounding the US-China trade agreement, which is due to expire later in the year, as well as the mid-year extension of the US Mexico-Canada trade agreement, will require close monitoring. 

In the US, economic growth is forecast to remain at 2.1% in 2026 before easing slightly to 2.0% in 2027. Eurozone economic growth is forecast at 1.2% in both 2026 and 2027, while Japan’s growth is forecast to remain at 0.9% in both years. 

China’s economic growth forecast remains unchanged at 4.5% for 2026, with similar growth expected in 2027. India’s growth forecast stands at 6.6% in 2026 and is projected at 6.5% in 2027. Brazil’s economic growth forecast remains at 2.0% for 2026, rising to 2.2% in 2027. Russia’s growth forecast for 2026 has been revised down slightly to 1.3%, while growth is expected to strengthen in 2027, reaching 1.5%.

Solid oil demand growth, outpacing supply growth

 Against this macroeconomic backdrop, global oil demand in 2027 is forecast to increase by a healthy 1.3mn bpd year on year, supported by continued solid economic activity in non-OECD countries. On a regional basis, OECD oil demand is forecast to grow by around 0.1mn bpd. This increase is expected to come mainly from the OECD Americas, with some support from OECD Europe, while OECD Asia-Pacific oil demand is projected to decline slightly. 

Oil demand growth in the non-OECD is forecast at around 1.2mn bpd in 2027. OPEC said this growth is expected to be driven primarily by Other Asia, India, China, the Middle East, Africa and Latin America. In terms of oil products, transportation fuels are expected to be the main driver of oil demand growth in 2027. Air travel is anticipated to see further expansion as both international and domestic traffic continue to increase. 

Gasoline demand is forecast to be supported by steadily rising road mobility in India, Other Asia, the Middle East and the US. On-road diesel demand is  expected to receive support from trucking activity, as well as industrial, construction and agricultural sectors, mainly in the non-OECD. Light distillates are forecast to be buoyed by petrochemical capacity additions, primarily in China and the Middle East. 

For 2026, global oil demand growth is forecast at 1.4mn bpd year on year, unchanged from the previous month’s assessment. The OECD is forecast to account for growth of around 0.15mn bpd, while the non-OECD is expected to contribute approximately 1.2mn bpd. 

On the supply side, non-DoC liquids production  in 2027 is forecast to grow by about 0.6mn bpd year on year. OPEC said this growth is underpinned by planned developments and projected upstream capital commitments. Upstream oil investment in non-DoC countries in 2027 is expected to total around $284bn, slightly higher than the level anticipated for 2026. 

Non-DoC liquids supply growth in 2027 is expected to be led by Latin America, contributing around 0.4mn bpd year on year. US liquids production is forecast to increase by a modest 30,000 bpd, primarily from non-conventional natural gas liquids, as US crude oil output is expected to decline. In addition to offshore producers in Latin America such as Brazil, other key growth contributors are forecast to include Canada, Qatar and Argentina. 

In 2026, non-DoC liquids production is forecast to grow by about 0.6mn bpd year on year, unchanged from the previous month’s assessment.  Brazil, Canada, the US and Argentina are identified as the main growth drivers. Natural gas liquids and non-conventional liquids production from countries participating in the OPEC+ Declaration of Cooperation (DoC) is forecast to increase by about 0.1mn bpd year on year in 2026, averaging around 8.8mn bpd, followed by a similar increase in 2027 to about 8.9mn bpd. Crude oil production by DoC countries fell by 238,000 bpd month on month in December to average around 42.83mn bpd, according to available secondary sources. 

Lower prices 

Crude oil prices weakened in December. The OPEC Reference Basket averaged $61.74 per barrel, down $2.72 month on month. ICE Brent front-month prices declined by $2.03 to average $61.63 per barrel, while NYMEX WTI fell by $1.61 to average $57.87 per barrel. The GME Oman front-month contract dropped by $2.57 to $61.96 per barrel. The Brent WTI front-month spread narrowed by $0.42 month on month to average $3.76 per barrel. 

Despite persistent selling pressure in futures markets, the forward curves of all major crude benchmarks remained in backwardation during December. OPEC said this signals supportive physical crude market fundamentals and a positive short-term global supply-demand outlook. The forward curves for ICE Brent and GME Oman flattened further month on month, while backwardation in the NYMEX WTI curve strengthened slightly.

Lower refining margins, tanker rates

 Refining margins declined across all regions in December following a sharp upward trend in recent months. In the Northern Hemisphere, the decline was attributed to product inventory builds, particularly for transport fuels, amid seasonal demand-side pressures. A reduction in European product flows to West Africa also contributed to weaker margins. In Southeast Asia, rising domestic product supply, softening export incentives and firm availability of products from the Middle East weighed on refining profitability. 

In tanker markets, dirty tanker spot freight rates declined in December after strong gains since mid year. VLCC spot rates fell but remained at elevated levels on continued demand for long-haul flows. Spot rates on the Middle East-to-East route declined  by 12% month on month, while Middle East-to West rates fell by 11%. Suezmax rates also declined, as reduced tightness in the VLCC market removed some spillover support. Rates on the US Gulf Coast to-Europe route dropped by 12%. Aframax spot rates saw a more moderate decline, with cross Mediterranean rates down 4% month on month. 

In contrast, clean tanker spot freight rates continued to rise as refineries ramped up operations following maintenance, increasing demand for long-haul movements. Rates on the Middle East-to East route rose by 14% month on month, while rates in the Mediterranean increased by 6%. 

Mixed flow trends

 Crude and refined product trade flows showed mixed trends in December. US crude imports were broadly unchanged at just under 6mn bpd, while crude exports increased by nearly 10% month on month. US product exports were also broadly unchanged over the period. 

In OECD Europe, crude imports rose month on month in November. Product imports continued to decline, while product exports jumped to the upper end of the five-year range. Japan’s crude imports increased further in November to average 2.4mn bpd, supported by regional product demand. Product exports from Japan rose by 6%, driven mainly by fuel oil. 

China’s crude imports surged in November to their highest level since 2023, averaging 12.4mn  bpd, an increase of around 9% month on month following the release of crude import quotas. China’s product imports also strengthened, led by naphtha and fuel oil. India’s crude imports remained above the five-year average at 5.1mn bpd, while product exports increased, supported by higher gasoline and naphtha exports that offset a further decline in diesel shipments. 

Increased OECD inventories 

OECD commercial inventories rose modestly in November. Preliminary data show stocks increased by 4.0mn barrels month on month to 2,840mn barrels. Inventories were 77.6mn barrels higher than a year earlier and 0.3mn barrels above the latest five-year average, but remained 101.5mn barrels below the 2015–2019 average. Crude stocks rose by 8.1mn barrels, while product stocks fell by 4.1mn barrels. In terms of days of forward cover, OECD commercial stocks rose by 0.2 days to 62.2 days, remaining below longer-term averages. 

Higher demand for OPEC+ crude 

Finally, demand for crude from countries participating in the OPEC+ DoC is forecast to remain at 43.0mn bpd in 2026, unchanged from the previous month’s assessment and about 0.6mn bpd higher than in 2025. For 2027, demand for DoC crude is forecast to increase to 43.6mn bpd, around 0.6mn bpd higher than the 2026 level.