Global Overview of the Oil and Gas Market: News from the Energy Sector on Sunday, January 25, 2026
As of the end of January 2026, the situation in the global oil and gas markets is characterized by ambiguity. Oil prices have recently received support due to renewed geopolitical tensions and high winter demand: the Brent price hovers around the mid-$60 per barrel mark after several weeks of increases. Simultaneously, concerns persist regarding a potential oversupply throughout the year, as production remains at a high level, and global reserves could begin to rise. The European gas sector is under pressure due to an unusually cold winter: gas storage facilities are 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 the Russian energy sector have intensified 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 continues at a rapid pace. By the end of 2025, renewable energy sources (RES) accounted for nearly half of electricity generation in the European Union—a significant milestone in the energy transition, although the stability of energy systems still largely depends on traditional resources, especially during peak demand periods. Global coal consumption, driven primarily by Asia, reached a record level in 2025, highlighting the persistent reliance on fossil resources, despite accelerated growth in the RES sector. In Russia, domestic fuel prices saw a noticeable increase 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 commodity sectors as of this date.
Oil Market: Geopolitical Tensions Heat Up Prices Amid Oversupply Concerns
Global oil prices have recently stabilized at a relatively elevated level due to several factors. The North Sea Brent trades at around $65–66 per barrel, while American WTI is approximately $61, rebounding from five-month lows reached at the end of 2025. Nonetheless, current prices remain significantly below last year's peaks, and the market is exercising caution in light of signals suggesting that supply may outpace demand in the coming months.
- Geopolitical Tensions. The risk of conflict in the Middle East has flared up again, with US President Donald Trump renewing threats of military action against Iran, accompanied by a demonstrative increase in naval presence in the region. These developments raise the geopolitical risk premium in oil prices, considering Iran's role as one of OPEC's leading producers.
- Seasonal Demand and Weather. The cold weather in Europe and a strong winter storm in North America have resulted in increased fuel consumption for heating. Demand for petroleum products (primarily diesel used for heating) is rising, providing support to oil prices despite an overall slowdown in the global economy.
- The Dollar and Financial Markets. The weakening of the US dollar to minimal levels over the past several months has made commodities cheaper for holders of other currencies, boosting additional demand from investors. Simultaneously, hedge funds have increased their 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 the decision made at the OPEC+ meeting in November, members halted quota increments for January-March 2026, aiming to prevent an oversupply during the traditionally weak first quarter. The maintenance of OPEC+ restrictions supports the market and protects prices from falling.
Collectively, the current impact of these factors ensures relative stability in oil prices and partially offsets the recent market decline. However, analysts warn of the possible emergence of oversupply later in 2026: according to the International Energy Agency's forecast, global oil reserves 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 laying cautious expectations for the upcoming months.
Gas Market: Europe Consumes Reserves at Record Rates Amid Winter Cold
The focus of the gas market is on Europe, which is facing a sharp increase in gas consumption due to the frigid temperatures. In January, European countries were forced to withdraw gas from underground storage facilities (USFs) at the highest rate in the last five years. According to industry monitoring, the average daily withdrawal in the first half of the month reached approximately 730 million cubic meters, leading to a rapid depletion of reserves. By January 20, the total capacity of storage in the EU fell below 50% (down from ~62% the previous year), significantly lagging behind the typical seasonal level (around 67% for this date).
The rapid reduction of reserves has driven up gas prices in the region. Just at the end of December, gas futures prices at the TTF hub were maintained within a narrow range of €28–29 per MWh; however, by mid-January, prices surged to €36–37 amid forecasts of further cooling and concerns about reserve levels. Subsequently, the market corrected to €34–35/MWh, but volatility significantly increased compared to the calm experienced last summer. Market participants are closely monitoring weather forecasts: an expected cold wave at the end of the month may necessitate additional imports of LNG and further price increases to compete for supplies with Asian buyers.
Despite extreme seasonal demand, Europe is currently avoiding acute shortages thanks to diversified sources of supply. Norwegian pipeline gas is being supplied in stable volumes, while LNG imports remain high—EU countries received about 81 billion cubic meters of LNG in 2025, more than half of which (57%) was supplied by the United States. However, Europe's reliance on American LNG continues to grow, raising concerns among some experts, as an excessive concentration on a single supplier contradicts the goals of the REPowerEU program to strengthen energy security through diversifying sources. The complete cessation of EU imports of Russian gas from 2026 intensifies this trend: as Russian pipeline gas exits the market, the European market is becoming increasingly dependent on global LNG supplies and weather factors. Experts also warn that significant depletion of reserves this winter will complicate the task of filling USFs for the next heating season and may force Europe to procure gas in the summer at higher prices.
International Politics: Sanction Pressure Increases, Energy Flows Restructured
At the end of 2025, the West imposed new strict restrictions on the Russian oil and gas sector, further complicating trade in energy resources from the RF. The US and EU expanded sanctions lists in December, directly targeting the largest Russian oil companies (including Rosneft and Lukoil) and maritime transportation for the first time. Additionally, the European Union closed remaining loopholes in the fuel embargo, banning imports of oil products produced from Russian oil in third countries—a measure that seriously affected resale schemes through India and Turkey. Finally, as of January 1, 2026, a legally mandated full ban on the procurement of Russian natural gas came into effect in the EU, marking the effective completion of a lengthy process to reduce energy dependence on Russia.
These steps have forced Moscow to actively redirect energy resource exports to friendly markets. In January 2026, China sharply increased its purchases of Russian oil, compensating for declining sales to India and Turkey. Traders estimate that Russian oil shipments by sea to China reached nearly 1.5 million barrels per day—up from ~1.1 million in December—while including record volumes of Urals for Chinese refineries (over 400,000 barrels per day). Simultaneously, the volume of Russian supplies to India declined to below 1 million barrels per day (down from about 1.3 million on average in 2025), and Turkey cut its Urals imports to about 250,000 barrels per day (down from 275,000 averages and peaks of 400,000 in the summer of 2025). The surplus of unsold Russian barrels has intensified price differentiation: the discount on Urals in Asia has widened to $10–12 relative to Brent, reflecting limited opportunities for redirecting flows.
The decline in oil imports from Russia by India and Turkey is largely due to sanction limitations on the trade of petroleum products. As the EU banned imports of diesel fuel and other products made from Russian oil, Indian and Turkish refiners lost some export markets in Europe and were forced to reduce the share of Russian crude in their feedstock. India has proactively declared its readiness to fully replace Russian oil with alternative sources in the event of tightening sanctions: Oil Minister Hardeep Singh Puri noted that the country has devised a diversification plan for imports in anticipation of secondary US sanctions against purchasers of Russian raw materials. Thus, sanction pressure gradually reconfigures global energy flows: Russia's share in European markets aims for zero, while Moscow's dependence on exports to China and other Asian countries steadily rises.
Meanwhile, the prospects for alleviating geopolitical tension remain elusive. The war in Ukraine continues with no signs of a quick resolution, and diplomatic contacts between Russia and the West have been minimized. Accordingly, energy sanctions are unlikely to be loosened in the foreseeable future, forcing companies to adapt to new long-term trading routes and conditions.
Asia: Demand Rises, Countries Balance Between Imports and Domestic Production
In China, demand for energy resources remains high, although the pace of growth has slowed alongside an economic cooldown. The nation is still the world's largest importer of oil and natural gas but is simultaneously increasing domestic production and entering long-term contracts for diversifying supplies. In 2025, Chinese companies signed record contracts for LNG imports (including long-term agreements with Qatar) and increased purchases of pipeline gas from Central Asia and Russia. Concurrently, Beijing is investing heavily in renewable energy and electric transport, aiming to gradually reduce its economy's dependency on fossil fuels.
India is rapidly emerging as a leading player in energy consumption growth. In December 2025, domestic consumption of petroleum products in the country reached a record 21.75 million tons (around 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 prioritizes energy security: strategic reserves are being expanded, production at new fields is encouraged, and state-owned refineries set a historical record for petroleum product exports last year. Simultaneously, the country is increasing its renewable energy generation capacity, but to ensure energy balance, it continues to rely heavily on coal-fired plants. Thus, Asian giants China and India continue to boost their aggregate energy consumption, balancing between increasing imports and developing local production, which positions them as key players in the global energy market.
Energy Transition: Record Performance in RES and Balance of Traditional Generation
The transition to low-carbon energy worldwide is gaining momentum. In 2025, many countries reported record levels in clean energy: for instance, renewable sources exceeded 48% in EU electricity generation, and cumulative global solar and wind power capacities grew by over 15%. Investment in renewable energy and related technologies (networks, storage systems) also reached historic highs, surpassing capital investments in oil and gas extraction projects. Major economies (China, the US, EU) have announced large-scale programs to stimulate green energy and decarbonization, aimed at achieving carbon neutrality within a 20-30 year horizon.
However, the rapid growth of RES comes with challenges for energy systems. The variable nature of solar and wind generation requires backup capacities and energy storage infrastructure. During adverse weather conditions (calm, drought), countries must rely on traditional power plants—gas, coal, or nuclear—to ensure stable electricity supply. Many states are postponing the shutdown of coal-fired power plants and investing in gas peaking capacities for load balancing until new energy storage technologies (e.g., industrial batteries, hydrogen solutions) achieve widespread adoption. Thus, the global energy balance is in a state of transformation: the share of RES is steadily rising, but fossil fuels still maintain a key role in ensuring reliable energy supply.
Coal: Global Demand Reaches Historical Peak Ahead of Expected Decline
Despite efforts towards decarbonization, the global coal market demonstrated record consumption volumes in 2025. According to the IEA, global coal consumption increased by approximately 0.5%, reaching around 8.8 billion tons—a new historical maximum, primarily due to increased coal burning in Asian electricity generation. China and India, facing growing electricity needs, continue to commission modern coal-fired power plants, compensating for declines in coal demand in Europe and North America. High gas prices in recent years have also prompted some Asian consumers to temporarily switch to cheaper coal.
However, most analysts concur that the current peak in coal demand may be the last. Forecasts from the IEA and other organizations indicate stabilization and gradual decline of global coal consumption by the end of the decade as numerous RES and nuclear generation projects come online. More generally, a symbolic reduction in coal demand is expected in 2026, primarily driven by a shift in electricity generation in China, where the government has set a target to reduce coal usage in the energy balance. International coal trade is also likely to decline: key importers seek to reduce reliance on coal generation, which may weaken the export potential of suppliers like Australia, Indonesia, South Africa, and Russia. Nevertheless, in the short term, coal continues to play a significant role, providing baseload generation in many developing countries.
Russian Oil Products Market: Fuel Price Increases and Stabilization Measures
The domestic fuel market in Russia has been experiencing price pressure 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% in just two weeks, significantly outpacing overall inflation. The primary factors include an increased tax burden (as of January 1, the VAT rate was raised from 20% to 22%, and excises on oil products rose by about 5%) and a continuing relatively limited volume of supply in the domestic market. In 2025, the cost of motor fuel in the RF increased by 8–11%, exceeding consumer price growth rates, and this trend has continued into the new year, raising concerns among the authorities.
The Russian government is taking steps in partnership with oil companies to normalize the situation in the fuel market. The damping mechanism continues to operate, partially compensating producers for the difference between export and domestic prices, although declining export revenues are limiting the ability to subsidize. Monitoring of exchange prices for gasoline and diesel is intensified, and relevant authorities are demanding that producers increase domestic supply. Earlier, in the fall of 2025, authorities resorted to temporary export restrictions on oil products to lower domestic prices; if the trend of rising prices continues, similar measures in 2026 cannot be ruled out. Simultaneously, long-term solutions are being considered, such as adjustments to tax policy or establishing minimum fuel reserves to enhance market resilience to shocks. Stabilizing prices at gas stations is a priority given its influence on the socio-economic situation and inflation.
