Oil Market Report - February 2026

• Global oil demand is forecast to rise by 850 kb/d in 2026, up from 770 kb/d last year. As in 2025, non‑OECD economies will account for the entire increase, with China taking the lead on a country level. Petrochemical feedstock products will represent more than half of this year’s gains, compared with only a third in 2025 when transport fuels dominated growth.

• World oil supply plunged by 1.2 mb/d in January to 106.6 mb/d, as severe winter weather disrupted North American operations, while outages and export constraints curtailed Kazakh, Russian and Venezuelan flows. Following gains of nearly 3.1 mb/d in 2025, world oil output is now forecast to rise by 2.4 mb/d in 2026, to 108.6 mb/d, with growth roughly evenly split between non-OPEC+ and OPEC+ producers.

• Global refinery crude throughputs dropped from an all-time high of 86.3 mb/d in December to 85.7 mb/d in January, as the start of maintenance and lower margins impacted activity. Crude runs are forecast to increase by an average 790 kb/d to 84.6 mb/d in 2026, led by non-OECD regions, compared with an increase of almost 1 mb/d in 2025. Margins fell further in January, as December’s resurgent runs eased product market tightness.

• Observed global oil inventories rose by 37 mb in December, taking total 2025 stocks builds to 477 mb, or 1.3 mb/d. Chinese crude oil stocks built by 111 mb last year, while oil on water swelled by 248 mb, of which sanctioned oil accounted for 72%. OECD industry stocks rose by a counter-seasonal 3.9 mb in December, to surpass its five-year average for the first time since 2021. Preliminary data show global stocks surged by a further 49 mb in January.

• Benchmark oil prices increased steadily in January, with North Sea Dated crude rising $10/bbl over the month. Escalating geopolitical tensions, snow storms and extreme temperatures in North America, and Kazakh supply disruptions sparked the reversal to a bullish market. At the time of writing, Dated was trading around $73/bbl, with oil markets on tenterhooks about uncertain developments in the Persian Gulf.

Benchmark crude oil prices surged by $10/bbl over January as a number of supply outages tightened physical crude markets and geopolitical tensions rose between Iran and the United States. While prices gave back a few dollars at the start of February on reports of progress in ongoing negotiations to de-escalate the tensions, they quickly reversed course after the United States advised ships to steer clear of Iranian waters when navigating the Strait of Hormuz. ICE Brent futures traded around $70/bbl at the time of writing.

At the same time, OPEC+ producers reconfirmed their plan to maintain current production quotas through March. In this context, global oil supply is expected to rebound in the coming months as output recovers from the exceptional plunge in January, when extreme winter weather forced the shut-in of over 1 mb/d of output in North America. In addition, prolonged disruptions at Kazakhstan’s key export terminal since November were compounded by a power outage at the country’s largest field last month, temporarily tightening Atlantic Basin light crude markets.

Russian supply also declined in January, by a sizeable 350 kb/d, as its key customers came under increased pressure from Washington and broader EU sanctions. Shipments to India have been hit particularly hard as fresh EU restrictions on imports of petroleum products derived from Russian crude prompted key export refineries to look for alternative supplies. Tanker tracking data show Indian imports of Russian crude declined to 1.1 mb/d in January, the lowest level since November 2022 and down from 1.7 mb/d on average in 2025. By contrast, Russian crude deliveries into China surged to an all-time high last month. Venezuelan crude production dropped by 210 kb/d m-o-m to 780 kb/d in January, but its output is expected to rebound after Washington authorised a pathway for US-incorporated companies – including US‑based subsidiaries of international firms – to export Venezuelan oil. Overall, global oil supply is on track to rise by 2.4 mb/d in 2026, with growth evenly split between non-OPEC+ and OPEC+ countries assuming the bloc maintains its current production agreement.

On the other hand, world oil demand growth for 2026 has been revised moderately lower to 850 kb/d as economic uncertainties and higher oil prices weigh on consumption. As in 2025, non-OECD regions account for the entire increase. China remains the largest contributor to growth, of around 200 kb/d in both years, albeit well below its average growth over the past decade.

With supply continuing to outpace demand, observed oil inventories rose by a further 37 mb in December, taking global stock builds in 2025 to an extraordinary 477 mb, or 1.3 mb/d on average, a level not seen since 2020. Chinese crude oil stocks built by 111 mb last year, while oil on water swelled by 248 mb, of which sanctioned oil accounted for 72%. US NGL stocks rose by 49 mb. By contrast, relatively tight crude inventories in key pricing hubs put a floor for prices in a turbulent market facing numerous supply risks. As global refinery activity declines seasonally from an all-time high reached in December, and oil supply recovers from recent outages, it remains to be seen when surplus barrels finally move ashore in the Atlantic Basin.