Oil and Gas and Energy News — Saturday, January 17, 2026: Tightening Sanctions, Oil Glut, and Gas Supply Diversification. Oil, Gas, Electricity, Renewables, Coal, Refineries — Key Trends in the Energy Sector for Investors and Market Participants.
At the beginning of 2026, the fuel and energy complex is grappling with a continued geopolitical confrontation and a massive restructuring of global energy resource flows. Western nations are intensifying sanctions against Russia, with the European Union introducing new restrictions on energy trade. At the same time, there is an oversupply in the global oil market: slowing demand and the return of certain producers (such as Venezuela) are keeping Brent prices around $60 per barrel. The European gas market is experiencing historical changes: since January, gas supplies from Russia have effectively ceased; however, high storage levels in the EU and source diversification (from LNG to Azerbaijani gas) are currently ensuring price stability this winter. The energy transition is gaining momentum: 2025 marked a record increase in renewable energy capacity, although traditional resources remain necessary for the reliable operation of energy systems. Meanwhile, in Asia, demand for coal and hydrocarbons remains high, supporting the global raw materials market. In Russia, following last year’s spike in gasoline prices, authorities extended emergency restrictions on the export of petroleum products, aiming to maintain stability in the domestic fuel market.
Oil Market: Global Glut Keeps Prices in Check
Global oil prices at the beginning of 2026 remain relatively stable, staying within a moderate range. The benchmark Brent is trading around $60–65 per barrel, while American WTI is in the $55–60 range. The market shows an oversupply of about 2.5 million barrels per day. This is due to OPEC+ countries increasing production in the second half of 2025 to regain lost market shares. Additionally, U.S. oil production remains at high levels, and the partial return of Venezuelan volumes to the market after the easing of sanctions has increased supply.
Demand for oil is growing at a slower pace. The slowdown in China's economy and the conservation effect after years of high prices are limiting global consumption growth. In this context, analysts predict that oil prices could fall to $55 per barrel in 2026, at least in the first half of the year, if producers do not intervene. A key factor is OPEC+ policy: if the alliance continues to increase supply or delays new production limits, prices will remain under pressure. Leading exporters are unlikely to allow a market collapse and may again cut production if necessary to support prices. Geopolitical risks are present but have not yet led to supply disruptions.
Gas Market: Europe Seeks Alternatives to Russian Gas
The European gas market enters 2026 with a new reality: the near-total cessation of pipeline gas imports from Russia. As per EU resolution, from January 1, a ban on these supplies is in effect, depriving Europe of about 17% of its former imports. EU member states have preemptively filled gas storage facilities to over 90%. Despite the winter, the withdrawal of gas from storages is being managed without sharp price spikes. Exchange prices for gas in Europe remain significantly lower than the peaks of 2022, reflecting relative market equilibrium.
To compensate for the loss of Russian volumes, the European Union is focusing on several strategies:
- Maximizing pipeline supplies from Norway and North Africa;
- Increasing LNG imports from the USA, Qatar, and other countries;
- Expanding the use of the Southern Gas Corridor from Azerbaijan;
- Reducing demand through energy conservation.
The combination of these measures allows Europe to relatively smoothly navigate the current heating season despite the cessation of supplies from Russia. Simultaneously, Russia is redirecting its gas exports to the East: "Gazprom" reported a new record in daily gas deliveries to China via the Power of Siberia pipeline at the beginning of January.
International Politics: Sanctions and Energy
The sanctions standoff between Moscow and the West continues to escalate. At the end of 2025, the EU approved its 19th package of measures, a significant portion of which targets the energy sector. Among these are a reduction in the price cap for Russian oil starting February 2026 and a full ban on the import of Russian LNG by 2027. In response, Moscow extended its own embargo on oil sales to participants in the price cap until June 30, 2026.
Russian exports of oil and petroleum products remain at a relatively high level, thanks to redirecting flows to Asia, where China, India, Turkey, and other countries are buying crude at significant discounts. As a result, the global energy market has effectively split into two parallel tracks — the Western (sanctioned) and the alternative, where Russian hydrocarbons continue to find demand albeit at lower prices. Investors and market participants are closely monitoring sanctions policy, as any changes impact logistics and price dynamics in raw material markets.
Energy Transition: Records and Balance
The global shift to clean energy in 2025 was marked by unprecedented growth in renewable generation. Many countries have introduced record capacities for solar and wind power stations. In the EU alone, around 85–90 GW of new renewable energy sources were added over the year; the share of renewable energy in the U.S. surpassed 30%, while China brought online tens of gigawatts of "green" power plants, resetting its own records.
The rapid increase in renewable energy has raised questions about the reliability of energy systems. During periods of calm or low sunlight, backup capacities from traditional power plants are still needed to cover peak demand and prevent outages. Consequently, energy storage projects are actively developing worldwide — large battery farms are being constructed, and technologies for storage in the form of hydrogen and other carriers are being researched.
BP's experience, as it decided to cut investments in renewable energy and write off several billion dollars in "green" assets, demonstrated that even oil and gas giants must balance environmental goals with profitability. Despite the booming renewable sector, traditional oil and gas business still generates the most profit. Investors demand a cautious approach: "green" projects must be developed without compromising financial stability. The energy transition continues, but the lesson from 2025 is the necessity for a more balanced strategy that combines accelerated adoption of renewables with maintaining the reliability of energy systems and the profitability of investments.
Coal: High Demand in Asia
The global coal market in 2025 remained on the rise, despite global goals to reduce coal usage. The main reason is the consistently high demand in Asia. Countries like China and India continue to burn huge volumes of coal for power generation and industrial needs, offsetting declines in consumption in Western economies.
China accounts for nearly half of the world's coal consumption and, even with production exceeding 4 billion tons per year, has to increase imports during peak periods. India is also ramping up production, but with rapid economic growth, it must import significant volumes of fuel, primarily from Indonesia, Australia, and Russia.
High Asian demand supports coal prices at a relatively high level. Major exporters — from Indonesia and Australia to South Africa — have increased revenues due to stable orders from China, India, and other countries. In Europe, following a temporary spike in coal usage in 2022–2023, its share is again declining due to the development of renewable energy sources and the resumption of nuclear generation. Overall, despite the climate agenda, coal will retain a significant share of the global energy balance in the coming years, although investments in new coal capacities are gradually decreasing.
Russian Market: Restrictions and Stabilization
The Russian government has been manually controlling fuel price increases since autumn 2025. After wholesale prices for gasoline and diesel reached record levels in August, a temporary ban on the export of major petroleum products was introduced, extended until February 28, 2026. The restrictions cover the export of gasoline, diesel fuel, fuel oil, and gas oils, and have already had an effect: wholesale prices have decreased by tens of percent from peak levels by winter. Retail price growth has slowed, and by the end of the year, the situation has stabilized — filling stations are well-supplied with fuel, and panic buying has dissipated.
For oil companies and refineries, these measures mean lost profits, but authorities need the business to "tighten their belts" for market stability. The cost of oil production at most Russian fields is low, so even at prices below $40 for Russian oil, profitability is not critically threatened. However, the reduction in export revenues poses risks for launching new projects, which require higher global prices and access to foreign markets.
The government is refraining from direct compensation for the industry, stating it has the situation under control and that energy companies are still making profits despite reduced exports. The domestic fuel and energy sector is adapting to new conditions. The main task for 2026 is to maintain a balance between controlling domestic energy prices and supporting export revenues, which are vital for the budget and the development of the industry.
