News from the Oil and Gas Sector — Monday, January 19, 2026: A New Wave of Sanction Pressure, Oil Surplus, and Record LNG Imports. Oil, gas, electricity, renewable energy, coal, petroleum products, refineries — key trends in the global fuel and energy complex for investors and market participants.
The beginning of 2026 is marked by an ongoing geopolitical confrontation and a significant restructuring of global energy resource flows, drawing the attention of investors and market participants. Western countries continue to maintain pressure on Russia with sanctions: the European Union is preparing a new package of restrictions in the energy sector, aiming to completely eliminate Russian oil and gas imports. At the same time, the global oil market is experiencing an oversupply, with sluggish demand growth and the return of some producers (such as the gradual recovery of production in Iran and Venezuela) keeping the price of Brent around $60 per barrel. The European gas market is managing the winter peak in consumption thanks to record LNG imports and diversification of supply (including new volumes of gas from Azerbaijan), which helps to contain price increases even with the reduction of Russian pipeline exports. The global energy transition is gaining momentum: 2025 saw record capacities of renewable energy being brought online, although reliable operation of energy systems still requires reliance on traditional resources. In Asia, demand for coal and hydrocarbons remains high, supporting the global commodity market, while in Russia, following last year's spike in gasoline prices, authorities are extending emergency restrictions on the export of petroleum products to maintain stability in the domestic fuel market. Below is a detailed overview of the key events and trends in the oil, gas, energy, and commodity sectors as of this date.
Oil Market: Oversupply Limits Price Growth
Global oil prices at the start of 2026 are being maintained at moderate levels due to a persistent oversupply. The benchmark Brent blend is trading around $60–65 per barrel, while U.S. WTI is in the range of $55–60. These price levels are approximately 10–15% lower than a year ago, reflecting a gradual correction following the peaks of the energy crisis in 2022–2023. The market sees an oversupply of about 2–2.5 million barrels per day, as OPEC+ increased production in the second half of 2025 to regain lost market share. Additionally, supply is bolstered by the U.S. (where shale oil production remains high), as well as a partial return of volumes from previously sanctioned countries—Iran and Venezuela have noted a rise in export capabilities after some restrictions were eased. Meanwhile, global demand growth remains restrained: the slowdown in the Chinese economy and energy-saving effects following a period of high prices are limiting the increase in oil consumption. Analysts estimate that without a significant rebound in demand or new actions from producers, prices could drop to $55 per barrel in the first half of 2026. A key factor is OPEC+ policy: if the alliance does not move to reduce production and continues its current course, prices will remain under pressure. Leading exporters are unlikely to allow a market crash and may restrict supply again if necessary to support prices. Geopolitical risks are also present, but so far they have not led to supply disruptions: recent easing of tensions in the Middle East quickly eliminated any pricing premium, and oil quotes soon returned to previous levels. Thus, the oil market is approaching a situation of equilibrium, although the balance favors buyers—oversupply and moderate demand prevent significant price increases.
Gas Market: Winter, LNG, and New Routes Replace Russian Supplies
The European gas market entered 2026 under radically new conditions—almost entirely without pipeline gas from Russia. As of January 1, the EU's ban on the majority of such supplies came into effect, and Europe had prepared in advance for this step. EU countries filled underground gas storage facilities (UGS) to more than 90% by the start of winter; by mid-January, reserves had decreased to about 55–60% of capacity, which is still above average levels from previous years. Despite strong cold temperatures, gas withdrawals from UGS are proceeding as planned, without panic, while exchange prices remain significantly lower than the peaks of 2022.
The main reason for stability is record imports of liquefied natural gas (LNG). European LNG terminals are operating at maximum capacity in January: daily regasification volumes exceed 480 million cubic meters, surpassing previous historical records. This influx of LNG compensates for the cessation of Russian transit and mitigates gas price increases. Although spot prices in Europe have risen by 30–40% since the beginning of the month due to the cold weather, they are still far from the extreme values seen during the energy deficit of 2022. To meet demand in the face of limited supplies from Russia, Europeans are relying on several strategies:
- Maximizing pipeline gas supplies from Norway and North Africa;
- Increasing LNG imports from the U.S., Qatar, and other countries;
- Expanding the utilization of the Southern Gas Corridor (supplies from Azerbaijan to EU countries);
- Reducing domestic consumption through energy-saving measures and increasing energy efficiency.
The combination of these measures allows Europe to navigate the current heating season relatively confidently, even without Russian gas. Additionally, Russia is redirecting its exports eastward: Gazprom reported record daily gas shipments to China via the Power of Siberia pipeline in January. Regarding the global market, seasonal demand increases are also felt in Asia: key importers in Northeast Asia are ramping up LNG purchases, and the Asian index JKM has risen to ~$10 per MMBtu (the highest in the past month and a half). Nevertheless, the global gas balance remains stable: flexible reallocation of flows between regions and increased production (including in the U.S., where Henry Hub prices remain around $3 per MMBtu) can cover the rising demand. In the coming weeks, the situation in the gas market will largely depend on the weather: even if cold weather persists, Europe has sufficient gas reserves and import capabilities to avoid a supply crisis.
International Politics: Sanctions, New Deals, and Flow Redistribution
The sanction confrontation between Moscow and the West is evolving in 2026. In late 2025, the EU approved its 19th package of measures, a significant portion of which targeted the Russian energy sector; this includes a decision to lower the price cap on Russian oil starting February 2026 and accelerate the abandonment of LNG imports from the Russian Federation (a purchase prohibition starting in 2027). At the beginning of 2026, Brussels announced preparations for the next step: legislatively banning remaining volumes of Russian oil imports in EU countries and implementing the reached agreement to completely halt purchases of Russian pipeline gas. Simultaneously, the United States and the European Union are tightening control over compliance with existing restrictions: as early as last fall, the U.S. Treasury imposed additional sanctions on oil companies Rosneft and Lukoil, while European authorities are reinforcing oversight of the tanker fleet transporting Russian oil in circumventing established rules. Russia, for its part, has extended its embargo on the sale of oil to states participating in the price cap until June 30, 2026.
At the same time, the export of Russian oil and petroleum products remains quite high due to the redirection of flows to Asia. China, India, Turkey, and several other countries continue to purchase Russian hydrocarbons at significant discounts to global prices. As a result, the global energy market is effectively divided into two parallel segments: the "western" segment, where sanctions and restrictions apply, and the alternative segment, where Russian raw materials find outlets, albeit at reduced prices. Investors and traders are closely monitoring sanction policies, as any changes in them affect logistics and market pricing conditions.
Meanwhile, the Western sanction strategy has adopted elements of flexibility regarding certain countries. As political changes occur in Caracas, the U.S. has signaled a willingness to accelerate the easing of oil sanctions against Venezuela. International companies have already received expanded licenses to operate in Venezuela: in the coming months, Chevron and other operators will be able to significantly increase Venezuelan oil exports. Additionally, Venezuela has signed its first contract for natural gas exports, marking a new chapter for its energy sector. Experts note that the recovery of Venezuela's oil and gas sector will be gradual—years of inadequate investment and sanctions have severely curtailed its production capabilities. However, the mere fact of returning additional volumes from Venezuela to the market strengthens consumer confidence and puts downward pressure on price growth expectations. Geopolitical tensions in the Middle East have also significantly decreased: by mid-January, unrest in Iran had subsided, and Washington's strong rhetoric regarding potential strikes against Iran had softened. As a result, risks of sudden supply disruptions of Middle Eastern oil have temporarily reduced. Thus, the beginning of 2026 is characterized by the conflicting influence of politics on energy markets: on one hand, sanction pressure on Russia remains high, while on the other, local de-escalation in some regions and selective easing of restrictions (such as with Venezuela) create a more favorable backdrop than previously expected.
Asia: India and China Navigate Between Import and Production Development
- India: Despite pressure from Western partners to reduce cooperation with sanctioned suppliers, New Delhi has only moderately reduced purchases of Russian oil and gas in recent months. India considers a complete abandonment of these resources impossible given their key role in national energy security. The country continues to receive raw materials from Russian companies on favorable terms: the discount on Urals crude for Indian buyers is about $4–5 to Brent prices, making supplies very attractive. As a result, India remains one of the largest importers of Russian oil while simultaneously increasing purchases of petroleum products (such as diesel) to meet growing domestic demand. At the same time, the Indian government is ramping up efforts to reduce future import dependence. Prime Minister Narendra Modi has announced a large-scale program for the exploration of deepwater oil and gas fields on the continental shelf. The state-owned company ONGC is already drilling deep wells in the Bay of Bengal and the Andaman Sea; initial results are viewed as promising. This initiative aims to discover new large hydrocarbon reserves and bring India closer to its long-term goal of energy self-sufficiency.
- China: The largest economy in Asia continues to increase energy consumption, combining increased imports with the growth of its own production. Beijing has not joined Western sanctions against Moscow and has taken advantage of the situation to increase purchases of Russian energy resources on favorable terms. Analysts estimate that in 2025, China's imports of oil and gas increased by 2–5% compared to the previous year, surpassing 210 million tons of oil and 250 billion cubic meters of gas, respectively. Growth rates have slowed slightly compared to the surge in 2024 but remain positive. Simultaneously, China is setting records for domestic production: in 2025, national companies produced more than 200 million tons of oil and about 220 billion cubic meters of natural gas, which is 1–6% more than the previous year's levels. The state is actively investing in the development of hard-to-reach fields, the implementation of new technologies, and increasing oil recovery from mature reservoirs. Nevertheless, given the scale of the Chinese economy, dependence on imports remains significant: about 70% of the oil consumed and around 40% of gas are still sourced from abroad. In the coming years, these proportions are unlikely to change significantly. Thus, the two largest Asian consumers—India and China—continue to play a crucial role in global commodity markets, navigating between the necessity to import vast amounts of fuel and the desire to develop their own resource base.
Energy Transition: Records in Renewable Energy and the Importance of Traditional Generation
The global transition to clean energy reached new heights in 2025, establishing significant benchmarks for the industry. Many countries brought record capacities of solar and wind generation online, leading to historical peaks in renewable energy production. In the European Union, total generation from solar and wind power plants for the year exceeded output from coal and gas-fired plants for the first time, solidifying the shift in balance toward green energy. In countries such as Germany, Spain, and the United Kingdom, the share of renewable energy in electricity consumption regularly exceeded 50% on certain days due to the introduction of new capacities. In the U.S., renewable energy also reached a record level: at the beginning of 2025, over 30% of total generation came from renewables, and the total amount of electricity generated from wind and solar over the year exceeded that produced by coal-fired plants. China remains the global leader in the scale of "green" construction— in 2025, the country added tens of gigawatts of new solar panels and wind turbines, continuously breaking its own records in clean energy production. Taking these trends into account, leading oil, gas, and electricity corporations continue to diversify their businesses: significant investments are being directed toward renewable energy projects, hydrogen technologies, and energy storage systems.
However, the impressive progress in clean energy requires maintaining a balance with traditional generation. The past year has demonstrated that during peak demand periods or adverse weather conditions (for example, during winter lulls with weak wind and solar generation), fossil fuel reserves remain critically important for reliable energy supply. In Europe, which has significantly reduced its coal share in recent years, some coal plants were forced back into operation during severe cold spells, while gas plants bore the brunt of increased loads when wind generation was lacking. In Asian countries, maintaining a base of coal generation safeguards energy systems from disruptions during spikes in consumption. As a result, while the world is moving quickly toward cleaner energy, it is still far from achieving complete carbon neutrality. The transition period is characterized by the coexistence of two models—rapidly growing renewable and traditional thermal generation, which adapts and smooths seasonal and weather fluctuations. Many governments' strategies involve simultaneously developing renewables and modernizing classic infrastructure, which should ensure the resilience of energy systems on the path to a low-carbon future.
Coal: Asian Demand Supports the Market at High Levels
Despite efforts toward decarbonization, the global coal market continues to be characterized by significant consumption volumes and relatively stable prices. Demand for coal remains high, especially in Asian countries. In China and India—the two largest consumers—this resource continues to play a key role in electricity generation and metallurgy. According to industry reports, global coal consumption in 2025 remained close to historical highs, dropping only by 1–2% compared to the record levels of 2024. The increased use of coal in emerging economies compensates for its shrinking share in the energy balance of Europe and North America. Many Asian countries continue to launch new highly efficient coal-fired power plants to meet the growing demand for electricity from the population and industry.
The pricing situation in the coal market is currently calmer than during the peak of the energy crisis: thermal coal quotes at the beginning of 2026 are in the range of around $100–110 per ton, significantly lower than the highs of two years ago. Price softening is aided by rising supply—leading exporters (Indonesia, Australia, South Africa, Russia, etc.) have increased production and exports, while consumption in Europe is declining as renewables develop and nuclear generation returns to the forefront. Europe's gradual phase-out of coal continues: a significant event was the closure in January of the last deep coal mine in the Czech Republic, marking the end of 250 years of coal mining history in that country. Nevertheless, on a global scale, coal remains an important component of the energy balance. The International Energy Agency forecasts that global coal demand will plateau in the coming years, followed by a gradual decline. In the long term, tightening environmental policies and competition from cheap renewable sources will limit the development of the coal sector; however, in the short term, the coal market will continue to rely on consistently high Asian demand.
The Russian Market: Export Restrictions and Fuel Price Stabilization
Within Russia's internal fuel and energy complex, unprecedented measures continue to be in place to normalize the pricing situation. After wholesale prices for gasoline and diesel skyrocketed to record levels in August 2025, the Russian government imposed a temporary ban on the export of key types of petroleum products. These restrictions have been repeatedly extended and are now in force at least until February 28, 2026, covering the export of gasoline, diesel fuel, fuel oil, and gas oils. The cessation of exports has allowed for significant volumes of fuel to be redirected to the domestic market, which has noticeably reduced exchange prices by winter. Wholesale petroleum product prices have retracted by double-digit percentages from peak values, while the increase in retail prices at gas stations has slowed to about 5% by the year's end, fitting within the overall inflation framework. Thus, the fuel crisis has largely been contained: there is no gasoline deficit at filling stations, panic buying has subsided, and prices for end consumers have stabilized.
However, the cost of these measures has been a reduction in export revenue for oil companies and the budget. Russian oil producers have had to accept lost profits to saturate the domestic market. Authorities claim that the situation is under control: the production cost of oil in most Russian fields is low; therefore, even with Urals prices below $40 per barrel, major projects remain profitable. Nevertheless, the decline in export revenue—by the end of 2025, oil and gas revenues in the Russian budget plummeted by about a quarter compared to the previous year—creates risks for the launch of new investment projects that require higher global prices and access to external markets. The state does not provide direct compensation for companies; however, it continues to operate the damping mechanism (reverse excise tax), which partially offsets lost revenues from domestic fuel sales.
The Russian fuel and energy complex is adapting to new conditions in the era of sanctions. The main task for 2026 is to maintain a balance between curbing domestic prices for energy carriers and preserving export revenues, which are vital for budget replenishment and financing sector development. The government emphasizes that it is prepared to extend restrictions on petroleum product exports or introduce new tools if necessary to prevent shortages and price shocks for the population. At the same time, measures are being outlined to stimulate processing and find new sales markets for raw materials. So far, the steps taken allow for stable fuel supply within the country and keep prices at a level acceptable to consumers. Monitoring the situation in the fuel sector remains a priority for state policy, as it directly affects socio-economic stability and the resilience of Russia's oil and gas complex under external pressure.
