Energy and Gas 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 is facing new challenges amid 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.
- An extreme winter storm in the USA has temporarily disrupted up to 15% of oil production and significantly reduced gas production.
- Oil prices (Brent ~ $65/barrel) remain stable; OPEC+ signals the continuation of current production restrictions.
- Escalating US-Iran conflict raises supply disruption risks, despite ongoing peace talks regarding Ukraine.
- Natural gas prices in North America and Europe surged amid the cold; gas reserves in the EU fell to multi-year lows.
- Renewable energy sources reached a record share in Europe’s electricity generation, but weak networks and harsh winter weather revealed the need for backup capacity.
- The US 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 USA and Price Stability
In the USA, a powerful winter storm has led to a temporary halt of up to 2 million barrels per day of oil production (about 15% of the national level). The primary impact was felt in the Permian Basin, but production began to recover within a few days. Amid these developments, oil prices, which spiked earlier in the week, have stabilized: Brent hovers around $65 per barrel, while WTI is about $60. Despite the temporary disruptions, both benchmarks have maintained a weekly increase of approximately 2-3%.
The extreme cold has also affected oil refining. Several major US refineries reduced operations due to equipment freeze-up, leading to a spike in prices for petroleum products, particularly diesel and heating oil. Nevertheless, a significant fuel shortage was avoided thanks to inventories and the swift resumption of plant operations as temperatures rose.
Globally, oil supply is returning to pre-storm levels. In Kazakhstan, oil production at the largest field is set to resume following the repair of an export pipeline, increasing shipments of Caspian oil. OPEC+ member countries, ahead of their upcoming meeting, signal their commitment to current quotas, meaning no increase in production is planned for March. Thus, despite the ongoing turmoil, the global oil market remains relatively balanced.
Geopolitical Risks: Iran, Sanctions, and Talks
Geopolitical tensions are sustaining uncertainty in the energy market. The conflict between the USA and Iran has escalated, with President Donald Trump announcing the deployment of an "armada" to the shores of Iran and threatening actions for suppressing protests and Tehran's nuclear ambitions. In response, Iran has vowed to consider any attack as “total war.” Such statements add a risk premium to oil prices, as traders fear disruptions to supply from the Middle East.
Concurrently, cautious optimism surrounds ongoing negotiations between Russia, Ukraine, and the USA. Success in dialogue could lead to a gradual easing of Western sanctions on the Russian oil and gas sector, altering the configuration of global energy flows. However, the sanction regime remains strict: exports of Russian oil and gas are constrained by price caps and redirected primarily to Asia. Investors continue to evaluate 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 been hit by extreme cold. In the USA, the winter storm led to widespread “freezing” of wells: up to 16% of gas production was temporarily halted, exceeding the disruptions seen during the 2021 crisis. Daily gas production fell from about 110 to 97 billion cubic feet (from 3.1 to 2.7 billion cubic meters), which triggered a sharp price spike. Henry Hub futures soared more than double, exceeding $6 per million British thermal units (MMBtu), about $210 per thousand cubic meters. As temperatures moderated, prices retreated, but the situation remains extremely volatile and weather-dependent.
Europe also faced a gas deficit. By mid-winter, European gas storage levels had dropped to below 50% capacity (a multi-year low) as prolonged cold weather severely increased gas withdrawals. Spot prices in the EU soared to around $14 per MMBtu (approximately $500 per thousand cubic meters), a peak for the recent months. A significant contributing factor has been supply: US LNG exports temporarily decreased nearly by half due to terminal issues, limiting gas flow into Europe and driving prices higher. Some LNG shipments were redirected to the US domestic market for greater revenue, exacerbating issues in the global market.
In the coming weeks, gas prices in Europe will depend largely on weather conditions. If February turns out to be relatively mild, the market will see some relief, although gas reserves at the end of winter will still be significantly below normal. EU governments and companies will need to actively replenish storage during the off-season, competing for LNG in the global market. Analysts warn that another cold wave or supply disruptions could trigger another price surge, as the global gas market has become more interconnected and sensitive to local shocks.
Electricity and Coal: Network Strain
Energy systems in the Northern Hemisphere are experiencing increased strain. In the USA, the operator of the largest eastern grid (PJM) declared a state of emergency: daily peak consumption exceeded 140 GW, threatening rolling blackouts. To maintain balance, authorities had to deploy backup diesel generators and oil-fired power plants until the end of January. This helped avert a blackout but required burning more oil and coal instead of gas. Amid arctic cold, generation from wind and solar plants sharply declined, necessitating maximum utilization of traditional (hydrocarbon) capacity to meet demand.
A similar situation is unfolding in Europe: electricity demand surged, and several countries temporarily brought coal-fired power plants back online to cope with peaks. Although the share of coal in the EU's electricity generation decreased to a record 9.2% in 2025, coal usage has locally surged this winter. At the same time, infrastructure limitations became apparent: insufficient transmission capacity forces a reduction in wind farm output during peak production, resulting in missed opportunities for cheap energy and a price increase at other times. Experts are calling for expedited modernization of electrical networks and the implementation of storage systems to enhance grid resilience and reduce dependence on coal in emergencies.
Renewable Energy Growth and the Energy Transition
The transition to clean energy is accelerating. In 2025, EU countries sourced more electricity from wind and solar (30% of generation) than from all fossil sources combined (29%). Overall, low-carbon sources (renewables and nuclear generation) accounted for 71% of electricity output in the EU. Record levels of generation were aided by the commissioning of new capacity: the total installed capacity of solar parks grew by 19% over the year. In some countries (Spain, the Netherlands, Hungary, etc.), solar energy now covers more than one-fifth of national consumption.
Despite these successes, Europe is grappling with issues of energy affordability and network limitations. Price increases in 2025 coincided with peak usage periods of gas plants and forced shutdowns of some wind farms due to network overloads. To reduce prices and ensure stable integration of renewables, investments in the expansion of electricity networks and energy storage systems are essential. At the political level, some governments (e.g., Germany and the Czech Republic) have sought to ease EU climate measures, while Brussels concurrently negotiated a deal with Washington for the purchase of additional volumes of American energy resources. This has sparked debates about the balance between environmental goals and energy security.
The trend toward clean energy development is strengthening on a global scale. China and India set record levels of solar and wind power installations in 2025, marking the first reduction in carbon emissions from their electricity sectors in over 50 years, despite rising overall consumption. In 2026, further investments in green projects are expected worldwide. Nevertheless, the current crisis has reaffirmed that oil, gas, and coal remain indispensable for meeting peak demand and emergency situations. In the coming years, countries will face the challenge of combining accelerated renewable energy development with maintaining sufficient backup capacity from traditional fuels.
Venezuela: Returning to the Oil Market
An important development has been the easing of sanctions on Venezuela. Following a change in power in Caracas in January, Washington announced plans to lift some restrictions from 2019 to increase oil supply on the global market. A general license is expected to be issued, allowing foreign companies to expand operations in Venezuela's oil and gas sector. Recipients will include partners of the state-owned PDVSA, such as Chevron, Repsol, Eni, Reliance, and others, who have already applied to increase production and exports.
Experts predict that Venezuela's oil exports will start to grow rapidly. By the end of 2025, exports had plummeted to 500,000 barrels/day due to sanctions (down from 950,000 barrels/day in November), but in 2026, they may exceed 1 million barrels per day. The USA has already finalized the first $2 billion deal with Caracas for replenishing its strategic reserve and is also discussing a $100 billion investment plan for rejuvenating Venezuela's oil sector, covering everything from fields to refineries to power grids. The first tankers of Venezuelan oil have already arrived at US ports under special licenses, partially relieving PDVSA's storage facilities. Refineries along the US Gulf Coast, designed for heavy Venezuelan oil, are preparing to resume processing this feedstock. Increased volumes from Venezuela may adjust the balance in the OPEC+ market, but recovery in production is expected to take time due to aged infrastructure.
Market Expectations and Conclusions
Despite all the upheavals, the global energy market is entering February 2026 without panic, yet in a state of heightened readiness. Short-term risks (weather and politics) are keeping oil and gas prices volatile, but the systemic balance of supply and demand has not yet been disrupted. OPEC+ is preventing a deficit in the oil market, while the rapid recovery of production and international supplies is smoothing out local disruptions. Unless new extraordinary events occur, oil prices are likely to remain near current levels (~$60–65 for Brent barrels) until the next OPEC+ summit.
On the gas market, much will depend on the weather: a mild end to winter will help further reduce prices, whereas a new cold front could again lead to a spike. Europe faces the task of replenishing depleted gas reserves before next winter, and competition with Asia for LNG will continue to be a significant factor in maintaining high price levels. Investors are also watching political dynamics: any changes in relations regarding Iran and Venezuela or a shift in the war in Ukraine could significantly alter market sentiment.
In the longer term, the energy transition remains relevant, but recent events have underscored 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 goal will be achieving this balance: maintaining energy security while simultaneously advancing climate objectives.
