Crude & Products Recalibration: Market Volatility, OPEC+ Strategy, and the New Landscape for Refined Products

David Elward, Pricing Director at General Index, hosted this webinar with Reza Amanat, Managing Director for Asia at General Index. They were joined by two Kpler analysts: Amena Bakr, Head of Middle East Energy and OPEC+ Research, and Sumit Ritolia, Lead Analyst for Refining Supply and Modeling. The session was recorded on January 14, 2026. At the time, crude prices were near a five-year low, and the market expected a supply surplus of about 1.7 million b/d for the year.

Venezuela

The session came 11 days after US forces removed Nicolás Maduro from Venezuela. Amena said Venezuela has the world’s largest reserves, but they are difficult to extract. Kpler data put production at about 800,000 b/d in November and December. She expected short-term upside of 150,000 to 200,000 b/d. Returning to the 2 million b/d or more the country produced in the 1970s would take about a decade of investment and political stability. She saw no sign yet that international oil companies were willing to commit to that.

Sumit said higher Venezuelan output would also raise demand for naphtha, which is used to dilute the country’s heavy crude. The US Gulf Coast exported about 270,000 b/d of naphtha in 2025 and could redirect some of that supply.

Reza said the US Department of Energy’s fact sheet pointed to Washington controlling Venezuelan oil sales and revenues. Amena said it was too early to tell whether Venezuela, a founding member, would stay in OPEC. Reza said China had become the only buyer of heavy Boscan crude, taking about 9 million barrels in 2025. He added that Chinese stockbuilding and discounted Russian and Iranian supply would leave China with enough alternatives if those flows stopped.

OPEC+ and the price environment

Crude prices fell about 20% in 2025, and the average was the lowest since 2021. Amena said OPEC+ had stayed cohesive despite this. The group paused supply increases for the first quarter, when Kpler expected a surplus of 2.5 million to 3 million b/d. It could resume unwinding voluntary cuts in the second and third quarters as demand grows. Kpler forecast demand growth of 1.3 million b/d for 2026. Amena also said the market may be overestimating how much spare capacity the group holds.

Gulf producers can sustain low prices for longer than other members. Saudi Arabia has scaled back some projects and turned to debt markets to cover its budget deficits. Amena said its low production costs and long-term outlook make keeping the group together a priority. Saudi official selling prices for Asia were near a five-year low. She attributed this to competition for market share during an oversupplied quarter. She said Chinese stockbuilding continued to add demand for Saudi barrels.

Reza noted that Brent backwardation had steepened at the front of the curve, while Dubai had moved into contango. Further out, both curves flattened, which pointed to oversupply in the second half of 2026 and into 2027.

Diesel and EU sanctions on Russian-origin products

From January 21, the EU banned imports of oil products refined from Russian crude. Sumit said Reliance and MRPL, two of India’s main exporters of diesel and jet fuel to Europe, had already stopped processing Russian barrels. India’s imports of Russian crude fell to about 1.2 million b/d in December, the lowest since November 2022. Turkish refiners were still taking Russian crude, but volumes were down 20% to 30%.

European middle distillate cracks rose to about $40 per barrel in November, when the sanctions were announced. That was well below the $60 to $70 seen in 2022, and cracks have since eased to the mid-$20s. Sumit said Northwest Europe remains structurally short of diesel, but the deficit is smaller than in 2023 and 2024 because European refineries are running well. The US has limited room to send more diesel to Europe. Gulf Coast refiners are supplying the East Coast, where diesel stocks are low, and spring maintenance is heavy. More Venezuelan heavy crude would let those refiners make better use of their conversion units and raise distillate output.

Jet fuel: the product to watch

David said jet fuel was the main bullish story for the first quarter. Air travel had returned to pre-pandemic levels, and aviation fuel demand was expected to grow by 2.7% to 3% in 2026. The European jet crack was about $25 per barrel, $10 higher than a year earlier and above diesel. Sumit said additional supply would need to come from China, India, Kuwait’s Al-Zour refinery, and Saudi Arabia.

Outlook

Kpler expected Brent to trade between $60 and $65 per barrel in 2026. Amena said unrest in Iran had already added a risk premium of $4 to $5. Reza said the main risks were disruption to flows through the Strait of Hormuz and US seizures of tankers carrying sanctioned crude.

Watch the full webinar below.