Wednesday, 18 February 2026
Global oil markets remained resilient at the start of 2026, with crude prices holding near multi-month highs despite persistent worries about excess supply, according to the February edition of the Oil Market Monthly Report by Kamco Invest.
The report notes that benchmark prices climbed more than ten percent since the beginning of the year, supported largely by geopolitical tensions in the Middle East and Eastern Europe. Ongoing negotiations between the United States and Iran over nuclear capabilities, coupled with military posturing in the region and continued sanctions affecting Russian exports, added a risk premium to crude markets. At the same time, renewed Venezuelan export flows and a sharp rise in U.S. inventories during early February moderated some of the upward pressure.
Average Brent crude traded in the mid-to-high USD 60s per barrel during January, marking the strongest monthly average in roughly five months. While several forecasting agencies have slightly revised their near-term price outlooks upward to reflect recent strength, medium-term projections remain more conservative, with many institutions expecting prices to ease gradually into 2027 as supply growth re-enters the market.
On the demand side, the global outlook remains divided between major forecasting bodies. The Organization of the Petroleum Exporting Countries continues to project robust consumption growth of roughly 1.4 million barrels per day this year, driven primarily by emerging economies. In contrast, the International Energy Agency expects slower expansion of under one million barrels per day, citing economic uncertainty and higher price sensitivity. China’s consumption growth is increasingly scrutinised as domestic demand indicators soften, while India is projected to continue setting new records for refined fuel use despite short-term fluctuations.
Supply dynamics also shifted at the start of the year. Worldwide production declined in January following severe winter weather disruptions in North America and operational setbacks in Kazakhstan, where technical incidents temporarily curtailed output at major fields. Additional reductions were recorded across several OPEC+ members, including Russia and Venezuela, partly linked to infrastructure attacks and sanctions. Overall global supply slipped by more than one million barrels per day month-on-month, reversing part of the growth seen late last year.
Within the OPEC group, crude production fell to its lowest level in several months as most member states reported lower output. Only a handful of producers, including Iran and Kuwait, registered marginal increases. Despite the drop, the cartel retains significant spare capacity, with Saudi Arabia alone accounting for roughly two million barrels per day of potential additional supply. Market participants are watching closely for signals that OPEC+ could resume incremental production hikes after the current pause expires later in the first quarter.
Looking ahead, analysts’ price expectations for Brent crude remain clustered in the low-to-mid USD 60 range through mid-2026, with forecasts widening later in the year depending on the balance between geopolitical risk and renewed production growth. The report concludes that while immediate supply disruptions and political uncertainty continue to underpin prices, longer-term stability will depend on whether anticipated increases in output materialise and how strongly emerging markets sustain demand growth.
