News from the Oil, Gas, and Energy Sector for Sunday, January 25, 2026. Global Energy Market Overview: Oil, Gas, Electricity, Renewables, Coal, Oil Products, Geopolitics, Supply and Demand, Key Trends for Investors and Market Participants.
By the end of January 2026, the situation in global oil and gas markets remains ambiguous. Oil prices have recently received support from renewed geopolitical tensions and high winter demand; Brent prices are holding around the mid-$60 range per barrel after several weeks of growth. Simultaneously, concerns about a potential oversupply this year persist, as production remains at high levels and global inventories may begin to rise. The European gas sector is under pressure due to an unusually cold winter: gas storage is being depleted at record rates, which has already led to price increases from minimal levels, although they remain significantly below the crisis peaks of 2022. Western sanctions against Russia’s energy sector have tightened further at the beginning of the year, forcing Moscow to redirect oil exports to China, while former major buyers—India and Turkey—are reducing their purchases.
Meanwhile, the global energy transition is continuing at a rapid pace. By the end of 2025, renewable energy sources accounted for nearly half of electricity generation in the European Union—an important milestone on the path to energy transition, although the stability of energy systems still largely depends on traditional resources, especially during peak demand periods. Global coal consumption, driven by Asia, reached record levels in 2025, highlighting the ongoing reliance on fossil resources even amidst the accelerated growth in the renewable energy sector. In Russia, domestic fuel prices have significantly increased at the beginning of 2026 due to tax changes and limited supply, prompting authorities to take measures to stabilize the domestic oil products market and curb inflation. Below is a detailed overview of key news and trends in the oil, gas, electricity, and raw materials sectors on this date.
Oil Market: Geopolitics Fuels Prices Amid Oversupply Concerns
Global oil prices have recently stabilized at relatively elevated levels due to several factors. The North Sea Brent blend is trading around $65-$66 per barrel, while American WTI is approximately $61, recovering from five-month lows reached at the end of 2025. However, current prices remain significantly lower than last year's peaks, and the market is cautious due to signals that supply may exceed demand in the coming months.
- Geopolitical tensions. Risks of conflict in the Middle East have resurfaced: President Donald Trump has renewed threats to use military force against Iran, accompanied by an apparent increase in naval presence in the region. These developments raise the geopolitical risk premium in oil prices, given Iran's key role as a leading OPEC producer.
- Seasonal demand and weather. Cold temperatures in Europe and a powerful winter storm in North America are increasing fuel consumption for heating. Demand for oil products (especially diesel fuel used for heating) is rising, supporting oil prices despite the overall slowdown in the global economy.
- The dollar and financial markets. The weakening of the US dollar to minimal levels in several months has made commodities cheaper for holders of other currencies, stimulating additional demand from investors. At the same time, hedge funds have increased net long positions in oil to a five-month high, indicating a return of speculative optimism to the market.
- OPEC+ actions. The oil alliance is demonstrating a cautious approach to increasing production. According to a decision from the OPEC+ meeting in November, participants suspended production quota increases for January–March 2026 to prevent oversupply amid typically weak demand in the first quarter. OPEC+'s maintenance of restrictions continues to support the market and keep prices from falling.
Collectively, the current impact of the aforementioned factors ensures relative stability in oil prices and partially compensates for recent market declines. However, analysts warn of the possible emergence of oversupply later in 2026: according to the International Energy Agency's forecasts, global oil inventories could increase by several million barrels per day if demand does not accelerate. This factor limits the potential for further price growth—the market is factoring in cautious expectations for the coming months.
Gas Market: Europe Depleting Inventories at Record Rates Amid Winter Cold
The focus of the gas market is Europe, which is experiencing a sharp rise in gas consumption due to severe cold. In January, European countries are forced to withdraw gas from underground storage facilities (UGS) at the highest rates in the last five years. According to industry monitoring, the average daily withdrawal volume in the first half of the month reached about 730 million cubic meters, leading to a rapid decrease in inventories. By January 20, total storage levels in the EU dropped below 50% (compared to ~62% a year earlier), significantly lagging behind the normal seasonal level (around 67% for this date).
The rapid depletion of inventories has sent gas prices soaring in the region. Just at the end of December, gas futures on the TTF hub were locked in a narrow range of €28-29 per MWh; however, by mid-January, prices surged to €36-37 amidst forecasts of further cold weather and concerns about inventory levels. Subsequently, the market adjusted to €34-35/MWh, but volatility has markedly increased compared to the relatively calm summer of last year. Market participants are closely monitoring weather forecasts: an expected cold wave at the end of the month may necessitate additional LNG imports and further price increases to compete for supplies with Asian buyers.
Despite extreme seasonal demand, Europe is currently avoiding acute shortages thanks to diversified supply sources. Norwegian pipeline gas is arriving in stable volumes, and LNG imports remain high—with EU countries receiving about 81 billion cubic meters of LNG in 2025, more than half of which (57%) was supplied by the U.S. At the same time, Europe’s dependence on U.S. LNG continues to grow, raising concerns among some experts, as heavy reliance on a single supplier contradicts the goals of the REPowerEU program aimed at enhancing energy security through supply diversification. The complete phase-out of Russian gas imports by the EU starting in 2026 amplifies this trend: with the departure of Russian pipeline gas, the European market is becoming increasingly dependent on global LNG supplies and weather factors. Experts also warn that significant depletion of inventories in winter will complicate the task of refilling UGS ahead of the next heating season and may force Europe to purchase gas in summer at higher prices.
International Politics: Sanction Pressure Intensifies, Energy Flows Restructured
At the end of 2025, the West imposed new strict restrictions on the Russian oil and gas sector, further complicating the trade of energy resources from Russia. The U.S. and EU expanded sanction lists in December, directly targeting the largest Russian oil companies (including Rosneft and Lukoil) and maritime transport for the first time. Additionally, the EU closed remaining loopholes in the fuel embargo, prohibiting the import of oil products produced from Russian crude in third countries— a measure that heavily impacted resale schemes through India and Turkey. Finally, as of January 1, 2026, a legally enshrined complete ban on purchasing Russian natural gas entered into force in the EU, marking the effective conclusion of a long process to reduce energy dependency on Russia.
These steps have compelled Moscow to more actively redirect energy resource exports to friendly markets. In January 2026, China sharply increased purchases of Russian oil, offsetting declines in sales to India and Turkey. Traders estimate that seaborne supplies of Russian oil to China reached nearly 1.5 million bbl/day—up from about 1.1 million in December— including record volumes of Urals crude for Chinese refineries (over 400,000 bbl/day). Meanwhile, Russian supplies to India dropped to below 1 million bbl/day (from around 1.3 million on average in 2025), and Turkey reduced Urals imports to about 250,000 bbl/day (down from an average of 275,000 bbl/day and peaks of 400,000 bbl during the summer of 2025). The surplus of unsold Russian barrels is exacerbating price differentiation: the discount on Urals in Asia widened to $10-12 relative to Brent, reflecting the limited options for redirecting flows.
The drop in Indian and Turkish purchases of Russian oil is largely attributed to the imposed sanctions on oil product trade. With the EU banning the import of diesel fuel and other products produced from Russian crude, Indian and Turkish refiners lost some markets in Europe and were forced to reduce the share of Russian crude in their processing. India has proactively expressed its readiness to fully replace Russian oil with alternative sources in the event of tightened sanctions: Oil Minister Hardeep Singh Puri noted that the country had a diversification plan in place for imports in case of U.S. secondary sanctions against buyers of Russian crude. Thus, sanction pressure is gradually reshaping global energy flows: Russia's share in European markets aims towards zero, while Moscow's dependence on exports to China and other Asian countries is steadily increasing.
Meanwhile, prospects for easing geopolitical tensions remain elusive. The war in Ukraine continues without signs of a swift resolution, and diplomatic contacts between Russia and the West have been minimized. Accordingly, energy sanctions are unlikely to be eased in the foreseeable future, forcing companies to adapt to new long-term trade routes and conditions.
Asia: Demand Rising, Countries Balancing Between Imports and Domestic Production
In China, demand for energy resources remains high, though growth rates have slowed alongside an economic cooling. The country remains the world's largest importer of oil and natural gas, while simultaneously increasing domestic production and signing long-term contracts to diversify supplies. In 2025, Chinese companies signed record contracts for LNG imports (including with Qatar for decades ahead) and increased purchases of pipeline gas from Central Asia and Russia. At the same time, Beijing is making substantial investments in renewable energy and electric transport, aiming to gradually reduce the economy's reliance on fossil fuels.
India is rapidly emerging as a leading position in energy consumption growth. In December 2025, domestic consumption of oil products in the country reached a record 21.75 million tons (about 5 million barrels per day), increasing by 5% year-on-year. Experts estimate that India accounted for up to a quarter of the total increase in global oil demand in 2025. The Indian government is prioritizing energy security: strategic reserves are being expanded, production from new fields is being incentivized, and state-owned refineries set a historic export maximum for oil products last year. At the same time, the country is increasing its generating capacity based on renewables but continues to rely heavily on coal-fired power plants to ensure energy balance. Thus, the Asian giants, China and India, continue to increase their combined energy consumption, balancing between growing imports and developing domestic production, making them key players in the global energy market.
Energy Transition: Record Levels of Renewables and the Balance of Traditional Generation
The transition to low-carbon energy worldwide is gaining momentum. In 2025, many countries recorded record figures in clean energy: for instance, the share of renewables surpassed 48% in the EU's electricity generation, and global solar and wind generation capacity grew by more than 15%. Investment in renewable energy and related technologies (networks, storage systems) also reached historical highs, outpacing capital investment in oil and gas extraction projects. Major economies (China, the U.S., the EU) announced large-scale programs for promoting green energy and decarbonization aimed at achieving carbon neutrality within the next 20-30 years.
However, the rapid growth of renewable energy sources poses challenges for energy systems. The variable nature of generation from solar and wind farms requires backup capacity and energy storage infrastructure. During periods of adverse weather (calm, drought), countries are forced to rely on traditional power plants—gas, coal, or nuclear—to ensure stable electricity supply. Many states are delaying the decommissioning of coal-fired power plants and investing in gas "peaking capacity" for load balancing while new energy storage technologies (such as industrial batteries, hydrogen solutions) have yet to achieve wide implementation. Thus, the global energy balance is undergoing transformation: the share of renewables is steadily increasing, but fossil fuels still play a key role in ensuring reliable energy supply.
Coal: Global Demand Reaches Historical Peak Before Expected Decline
Despite efforts to decarbonize, the global coal market in 2025 demonstrated record consumption levels. According to the IEA, global coal consumption increased by about 0.5% and reached around 8.8 billion tons—a new historical maximum, primarily due to increased coal burning in the electricity generation sector, especially in Asia. China and India, facing rising electricity needs, continue to commission modern coal-fired power plants, offsetting declines in coal demand in Europe and North America. High gas prices in recent years have also prompted some Asian consumers to temporarily shift to cheaper coal.
However, most analysts agree that the current peak in coal demand may be the last. Forecasts from the IEA and other organizations indicate stabilization and gradual decline in global coal consumption by the end of the decade as many renewable and nuclear generation projects come online. Already in 2026, a symbolic reduction in coal demand is expected, primarily due to shifts in electricity generation in China, where the government aims to reduce coal use in the energy balance. International coal trade is also likely to decrease: key importers are seeking to reduce reliance on coal generation, which could weaken the export potential of suppliers such as Australia, Indonesia, South Africa, and Russia. Nonetheless, in the short term, coal continues to play a significant role, providing baseload power for energy systems in many developing countries.
Russian Oil Products Market: Fuel Price Increases and Stabilization Measures
The domestic fuel market in Russia has been experiencing price pressures since the beginning of 2026. In the first weeks of January, retail prices for gasoline and diesel continued to rise: according to official data, fuel prices increased by approximately 1.2-1.3% within just two weeks, significantly outpacing overall inflation. The main factors behind this trend include an increased tax burden (as of January 1, the VAT rate was raised from 20% to 22%, and excise taxes on oil products increased by around 5%) and a relatively limited supply in the domestic market. In 2025, the price of motor fuel in Russia rose by 8-11%, surpassing the growth rate of consumer prices, and this trend has continued into the new year, causing concern among authorities.
The Russian government, along with oil companies, is taking steps to normalize the situation in the fuel market. The damping mechanism is still in place, partially compensating producers for the difference between export and domestic prices, although declining export revenues limit subsidy capabilities. Monitoring of exchange prices for gasoline and diesel has been intensified, and relevant agencies are requiring producers to increase supplies to the domestic market. Earlier, in the fall of 2025, authorities resorted to temporary restrictions on oil products exports to lower domestic prices; if the price growth trend continues, similar measures may be repeated in 2026. Long-term solutions are also being considered, such as tax policy adjustments or the establishment of minimum fuel reserves to enhance market resilience to shocks. Stabilizing gasoline station prices is a top priority, considering its impact on the socio-economic situation and inflation.
