Oil and Gas and Energy News for Thursday, January 29, 2026: Global Oil and Gas Market, Electricity, Renewable Energy, Coal, Refineries, and Key Trends in the Energy Sector for Investors and Industry Participants.
The global fuel and energy complex (TEC) is facing new challenges in light of extreme winter cold and geopolitical tensions. Investors and market participants are closely monitoring the situation, assessing the impact of weather disasters, sanction policies, and the energy transition on the oil and gas sector and electricity generation.
- Severe winter storms in the U.S. have temporarily disrupted up to 15% of oil production and significantly reduced gas output.
- Oil prices (Brent ~ $65/barrel) remain stable; OPEC+ signals continuation of current production limits.
- The escalation of the U.S.-Iran conflict heightens supply disruption risks despite ongoing peace talks regarding Ukraine.
- Natural gas prices in North America and Europe have soared in response to the cold snap; gas reserves in the EU have dropped to multi-year lows.
- Renewable energy has achieved a record share in Europe’s electricity generation, but weak networks and harsh winter conditions have highlighted the need for backup capacity.
- The U.S. is easing sanctions on Venezuela following a change in power, paving the way for increased heavy oil exports to the global market.
Oil: Storm in the U.S. and Price Stability
In the U.S., a powerful winter storm caused a temporary shutdown of up to 2 million barrels per day of oil production (around 15% of the national output). The Permian Basin was hit hardest, but production began to recover within a few days. Against this backdrop, oil prices stabilized following an initial spike earlier in the week: Brent hovers around $65 per barrel, while WTI is around $60. Despite temporary disruptions, both benchmark grades have maintained an increase of about 2-3% over the week.
Extreme cold has also impacted oil refining. Several major U.S. refineries curtailed operations due to equipment freezing, leading to a spike in petroleum product prices—particularly for diesel and heating oil. Nonetheless, a serious fuel shortage was avoided thanks to inventories and the prompt resumption of operations as temperatures rose.
Global oil supply is, meanwhile, returning to previous levels. In Kazakhstan, production at the largest field is resuming following repairs to the export pipeline, increasing supplies of Caspian oil. OPEC+ countries signal their commitment to maintaining current production quotas prior to their upcoming meeting, indicating no plans to increase output in March. Thus, despite the disruptions, the global oil market remains relatively balanced.
Geopolitical Risks: Iran, Sanctions, and Negotiations
Geopolitical tensions are sustaining uncertainty in the energy market. The conflict between the U.S. and Iran has intensified, with President Donald Trump announcing the deployment of a "flotilla" to the shores of Iran and threatening actions due to the repression of protests and Tehran's nuclear ambitions. In response, Iran vowed to consider any attack as a "total war". Such statements add a risk premium to oil prices, as traders fear supply disruptions from the Middle East.
Simultaneously, cautious optimism is stemming from the ongoing negotiations between Russia, Ukraine, and the U.S. Successful dialogue could lead to a gradual easing of western sanctions against the Russian oil and gas sector, altering the configuration of global energy flows. For now, the sanctions regime remains strict: the export of Russian oil and gas is limited by price caps and redirected mainly to Asia. Investors continue to assess geopolitical risks, keeping a close eye on both Middle Eastern events and potential shifts in sanction policies.
Natural Gas: Cold Snap and Price Surge
The natural gas market has come under pressure due to extreme cold. In the U.S., the winter storm caused widespread "freezing" of wells: up to 16% of gas production was temporarily halted—more than during the 2021 crisis. Daily gas production fell from approximately 110 billion cubic feet to 97 billion cubic feet (from 3.1 to 2.7 billion cubic meters), triggering a sharp price spike. Henry Hub futures jumped more than double, surpassing $6 per million British thermal units (MMBtu), approximately $210 per thousand cubic meters. With the easing of cold weather, prices have retreated, but the situation remains extremely volatile and weather-dependent.
Europe also faced a gas deficit. By mid-winter, European gas storage facilities were below 50% capacity (a multi-year low), as prolonged cold weather sharply increased gas withdrawal. Spot prices in the EU surged to around $14 per MMBtu (approximately $500 per thousand cubic meters), marking a recent high. The supply factor played a significant role: U.S. LNG exports temporarily plummeted by nearly half due to terminal issues, restricting gas inflow to Europe and driving up prices. Some LNG cargoes were redirected to the U.S. domestic market for higher returns, exacerbating the situation in the global market.
In the coming weeks, gas prices in Europe will depend on weather conditions. If February proves relatively mild, the market will receive a reprieve, though gas reserves by the end of winter will still be much lower than normal. EU governments and companies will need to actively replenish storage in the inter-season, competing for LNG in the global market. Analysts warn that a new wave of cold or delivery delays could trigger another price spike, as the global gas market has become more interconnected and sensitive to local disruptions.
Electricity and Coal: Network Strain
Energy systems in the Northern Hemisphere are experiencing increased strain. In the U.S., the operator of the largest eastern power grid (PJM) declared a state of emergency: daily consumption peaks exceeded 140 GW, risking rolling blackouts. To maintain balance, authorities had to utilize reserve diesel generators and oil-fired power plants until the end of January. This helped avoid a blackout but required burning more oil and coal instead of gas. Amid arctic cold, generation from wind and solar farms plummeted, necessitating maximum utilization of traditional (hydrocarbon) capacities to meet demand.
Europe is facing a similar situation: electricity demand surged, and several countries temporarily brought coal-fired power plants back online to navigate peaks. Although coal's share in the EU's electricity mix dropped to a record 9.2% in 2025, coal usage has locally increased this winter. Simultaneously, infrastructure limitations have been exposed: inadequate network capacity necessitates curtailment of wind farm output during peak production, resulting in missed opportunities for cheap energy and rising prices at other times. Experts urge accelerating the modernization of electricity networks and the implementation of storage systems to enhance the resilience of energy systems and reduce dependence on coal in emergencies.
Growth of Renewable Energy and Energy Transition
The transition to clean energy continues at an accelerated pace. In 2025, EU countries generated more electricity from wind and solar (30% of generation) than from all fossil sources (29%) for the first time. Overall, low-carbon sources (renewable energy and nuclear generation) accounted for 71% of electricity production in the EU. Record generation was facilitated by the commissioning of new capacities: the total installed capacity of solar farms grew by 19% over the year. In some countries (Spain, the Netherlands, Hungary, etc.), solar energy already covers more than one-fifth of national consumption.
Despite these successes, Europe has faced issues of high energy prices and network constraints. The increase in prices in 2025 coincided with periods of peak gas usage and forced curtailments of some wind farms due to network overload. To reduce prices and stabilize the integration of renewable energy, investment in expanding electricity networks and energy storage systems is essential. At the political level, some governments (e.g., Germany and the Czech Republic) have achieved relaxation of EU climate measures, while Brussels simultaneously struck a deal with Washington to procure additional volumes of American energy resources. This sparked discussions about balancing ecological goals with energy security.
The trend towards clean energy development is strengthening on a global scale as well. In 2025, China and India commissioned record levels of solar and wind power plants, allowing them to reduce carbon emissions in their electricity sectors for the first time in over 50 years, despite rising overall consumption. In 2026, further investment influx into green projects worldwide is expected. Nonetheless, recent crises have reaffirmed that oil, gas, and coal remain indispensable for meeting peak demand and emergency situations. Over the coming years, countries face the task of balancing accelerated renewable energy development with maintaining adequate backup capacity from traditional fuel sources.
Venezuela: Return to the Oil Market
An important development has been the easing of the sanctions regime against Venezuela. In January, following a change of power in Caracas, Washington announced plans to lift some restrictions from 2019 to increase oil supply on the global market. A general license permitting foreign companies to expand operations in the Venezuelan oil and gas sector is expected to be issued. Recipients will include partners of the state-run PDVSA—Chevron, Repsol, Eni, Reliance, and others—who have already submitted applications to increase production and exports.
Experts predict that Venezuela's oil exports will begin to rise rapidly. By the end of 2025, due to sanctions, supplies fell to 500,000 barrels per day (down from 950,000 barrels per day in November), but in 2026, they may exceed 1 million barrels per day. The U.S. has already approved its first $2 billion deal with Caracas to replenish its strategic reserve and is also discussing a $100 billion investment plan for restoring Venezuela's oil sector—from fields to refineries and power grids. The first tankers carrying Venezuelan oil have already arrived at U.S. ports under special permits, partially alleviating PDVSA’s storage levels. Refineries on the U.S. Gulf Coast, designed for heavy Venezuelan oil, are preparing to resume processing this crude. Additional volumes from Venezuela could adjust the balance in the OPEC+ market, although it is expected that the restoration of production will take time due to aging infrastructure.
Market Expectations and Conclusions
Despite all the upheavals, the global energy market is entering February 2026 without panic, although it remains in a state of heightened readiness. Short-term risks (weather and politics) are sustaining volatility in oil and gas prices, but the system balance of supply and demand has not yet been disrupted. OPEC+ is keeping the oil market from shortages, and the rapid recovery of production and international supplies is smoothing local disruptions. Unless new emergencies arise, oil prices are likely to remain close to current levels (~$60–65 for Brent) until the next OPEC+ summit.
In the natural gas market, much will depend on the weather: a mild end to winter will help further lower prices, while a new cold front could lead to a spike again. Europe faces the task of replenishing depleted gas reserves before the next winter, and competition with Asia for LNG will continue to be a key factor in maintaining high price levels. Investors are also watching political developments: any changes regarding Iran and Venezuela or breakthroughs in the war in Ukraine could significantly alter market sentiment.
In the long term, the energy transition remains highly relevant; however, recent events reaffirmed the critical importance of reliable traditional capacities. Companies and governments will need to seek a balance between investing in renewables and ensuring reserves based on fossil fuels. In 2026, the key objective will be to achieve this balance: maintaining energy security while simultaneously advancing towards climate goals.
