News in Oil, Gas, and Energy Sector – Saturday, January 3, 2026: Sanction Standoff Continues; Oil Glut Pressures Market; Stability in Gas Supplies; Records in Green Energy
Current events in the fuel and energy sector as of January 3, 2026, draw investor attention due to a combination of market stability and geopolitical tensions. Following a challenging past year, the global oil market enters the new year showing signs of oversupply: Brent crude prices hover around $60 per barrel (almost 20% lower than the levels a year ago), reflecting cautious sentiment and OPEC+'s efforts to maintain balance. The European gas market demonstrates relative resilience halfway through winter, with underground gas storage in the EU still over 50% full, providing a buffer against moderate demand increases during cold spells. Against this backdrop, gas exchange prices remain relatively low, easing the energy cost burden for industries and consumers in Europe.
Meanwhile, the global energy transition is gaining momentum: many countries are experiencing new records in renewable energy generation, and investments in clean energy continue to rise. However, geopolitical factors persistently introduce uncertainty – the sanction standoff surrounding Russian energy exports remains, forcing major consumers like India to reevaluate their supply routes. In Russia, authorities are extending emergency measures to regulate the domestic fuel market, aiming to prevent new price spikes. The following is a detailed overview of key news and trends in the oil, gas, electricity, and commodity sectors as of this date.
Oil Market: Oversupply and Cautious Price Corridor
Global oil prices maintain a relatively stable but reduced level at the beginning of the year. The North Sea Brent is trading around $60 per barrel, while American WTI is near $57–58. These levels are significantly lower than last year's values, reflecting a gradual market weakening following the price peaks of previous years. In 2025, OPEC+ countries partially lifted production restrictions, which, along with increased production in the USA, Brazil, and Canada, led to a rise in global supply. For 2026, a surplus in oil is projected – according to the International Energy Agency, production may exceed demand by almost 4 million barrels per day. OPEC+ participants are adopting a cautious stance: the alliance agreed to maintain production at current quotas in the first quarter, pausing any further increases. This approach aims to prevent price crashes, yet opportunities for price growth are minimal – vast onshore oil stocks and record amounts on tankers en route indicate market oversaturation.
China, the largest oil importer, plays a distinct role in price formation. Last year, Beijing actively utilized strategic purchases, buying up excess raw materials when prices fell and cutting imports when prices rose. Thanks to this flexible approach, prices stabilized in a narrow band around $60–65 per barrel during the second half of 2025. At the end of the year, Chinese companies ramped up purchases of cheap oil, replenishing their reserves. Consequently, although a surplus is technically brewing in the market, a significant portion is currently absorbed by China, effectively setting a "floor" for prices. Nevertheless, further accumulation potential is not unlimited – China’s storage facilities are already filled with hundreds of millions of barrels, and in 2026, Beijing's strategy will become one of the decisive factors for oil quotes. Investors will closely monitor whether China continues to buy up oil surpluses to support demand or slows imports, which could increase downward pressure on prices.
Gas Market: Confident Reserves ahead of Continued Winter
The gas market displays relatively favorable trends for consumers. European countries entered winter with high reserves: by early January, EU underground gas storage facilities were filled to about 60–65%, slightly below record levels from the previous year but significantly above historical averages. A mild start to the winter season and energy-saving measures have enabled a reduction in gas withdrawals from storage, preserving a solid reserve for the remaining cold months. Additionally, steady supplies of liquefied natural gas (LNG) continue to compensate for the near-total suspension of pipeline supplies from Russia. In 2025, Europe increased LNG imports by a quarter, mainly due to enhanced exports from the USA and Qatar, having launched new receiving terminals. The additional volumes of LNG and moderate demand keep gas prices in Europe within a restrained range – around $9–10 per million BTU (approximately €28–30 per MWh for the Dutch TTF hub), significantly lower than peak values during the 2022 crisis.
In the current year, experts expect the relatively stable situation in the European gas market to persist unless extreme cold spells or unforeseen events occur. Even with the possibility of cold weather, Europe is much better prepared than two years ago: reserve stocks are large, and LNG suppliers have spare capacity to quickly ramp up shipments. Nonetheless, the demand factor in Asia remains a risk – if economic growth accelerates in China or other Asia-Pacific countries, competition for LNG supplies may intensify. For now, the balance in the gas market appears confident, with prices held at a moderate level. This environment is favorable for European industry and energy sectors, reducing costs and allowing for optimism regarding the remainder of the winter period.
International Politics: Sanction Pressures and Trade Restrictions Unyielding
Geopolitical factors continue to exert a significant influence on energy markets. The dialogue between Russia and the USA, cautiously resumed last summer, has yielded no notable results by early 2026. No direct agreements in the oil and gas sector have been achieved, and the sanctions regime remains fully in place. Moreover, signals are growing louder in Washington about the potential tightening of restrictions. The American administration links the lifting of some sanctions to progress in resolving political crises, and in the absence of such progress, is prepared to take new measures. For instance, a proposal is being discussed to impose 100% tariffs on exports to the USA of products from China if Beijing does not reduce purchases of Russian oil. Such statements heighten market nerves, although they currently remain at the level of rhetoric.
A recent incident underscores this resolve: in late December, the USA detained and confiscated a shipment of oil being transported by a Panama-flagged tanker, allegedly destined for China and having Iranian-Venezuelan origins. This case demonstrated Washington's determination to close channels for circumventing sanctions, even if it requires resorting to forceful methods at sea. Simultaneously, the European Union confirmed the extension of its sanctions against Russian energy exports and intends to maintain price caps on oil and oil products from Russia. Collectively, these factors indicate that the sanctions standoff is entering a new phase without signs of easing. The current situation forces energy-importing countries to seek flexible solutions – diversifying sources, utilizing shadow tanker fleets, transitioning to settlements in national currencies – to secure fuel amid ongoing political pressure. Global markets, in turn, are pricing in a premium for these risks and are closely monitoring the further development of dialogue among states.
Asia: India and China between Imports and Domestic Production
- India: Faced with tightening Western sanctions, New Delhi must adopt a flexible approach to oil purchases. The sharp reduction in imports of Russian energy resources at Washington's behest remains unacceptable to the country – Russian oil and gas are critically important for meeting economic needs, accounting for over 20% of India's crude oil imports. However, due to sanction pressures and logistical issues, at the end of 2025, Indian refineries slightly reduced purchases from Russia. According to industry analysts, in December, Russian oil supplies to India fell to ~1.2 million barrels per day – the lowest level in three years (down from a record ~1.8 million b/d a month earlier). To offset this decline and safeguard against disruptions, the largest refining corporation, Indian Oil, activated an optional agreement to receive a shipment of oil from Colombia, while exploring additional supplies from Middle Eastern and African countries. Simultaneously, India continues to negotiate for preferences: Russian suppliers offer it substantial discounts (estimated at about $4–5 to the Brent price for Urals), maintaining the attractiveness of Russian barrels even under sanction pressure. In the long term, New Delhi is increasing investments in exploration and production within its territory. In particular, a large-scale program for the development of deepwater oil and gas fields has been launched: the state-owned ONGC is drilling ultra-deep wells in the Andaman Sea, and early results are promising. These steps aim to increase India's energy independence, although in the coming years, the country will still remain heavily dependent on imports – over 85% of consumed oil comes from overseas.
- China: As the largest economy in Asia, it continues to balance between rising domestic production and increasing energy imports. Beijing has not joined Western sanctions against Moscow and has taken advantage of the situation to increase purchases of Russian oil and gas at favorable prices. By the end of 2025, China's oil imports again approached record levels – about 11 million barrels per day, only slightly below 2023 levels. Natural gas imports (LNG and pipeline combined) also remain high, supplying fuel to industry and power generation amid economic recovery. Simultaneously, China increases its domestic production annually: in 2025, internal oil production reached a record ~215 million tons (about 4.3 million barrels per day, +1% versus the previous year), and natural gas production exceeded 175 billion cubic meters (+5–6% YoY). The growth of domestic resources helps cover part of the demand, but does not eliminate the need for imports. Even considering all efforts, China still imports about 70% of its consumed oil and about 40% of its gas. The Chinese authorities are actively investing in the development of new fields, technologies to enhance oil recovery, and expanding storage capacity for strategic reserves. In the future, Beijing plans to further increase oil reserves, creating a "safety cushion" in case of market shocks. Thus, India and China – the two largest Asian consumers – continue to play a key role in global commodity markets, combining strategies for securing imports with the development of their resource base.
Energy Transition: Record Growth in RE and Traditional Generation's Role
The global transition to clean energy reached new heights in 2025, and this trend will continue in 2026. In the European Union, total electricity generation from solar and wind power plants exceeded generation from coal and gas-fired power plants for the first time at year-end. The share of "green" electricity in the EU's energy balance is steadily growing due to the deployment of many new capacities – after a temporary return to coal during the 2022–2023 crisis, European countries are once again actively phasing out coal power plants and betting on renewables. In the USA, renewable energy also set historical records: over 30% of the country's total generation now comes from renewables, and in 2025, the total amount of electricity generated from wind and solar exceeded that from coal-fired plants for the first time. China, being the world leader in installed renewable capacity, introduced dozens of gigawatts of new solar panels and wind turbines last year, renewing its clean energy production records. Globally, companies and governments are directing unprecedented funds towards the development of low-carbon energy. According to the International Energy Agency, total investments in the global energy sector exceeded $3 trillion in 2025, with more than half of these investments going towards renewable energy projects, upgrading power grids, and energy storage systems.
Such rapid growth in renewable energy is changing market structures but also presenting new challenges. The main challenge is ensuring energy system reliability amid the increasing share of variable sources. In 2025, many countries faced the necessity of balancing increased generation from solar and wind without prematurely abandoning traditional capacities. For example, in Europe and the USA, gas-fired power plants continue to play an important role as maneuverable reserve capacity in case of peak loads or dips in renewable energy production. In China and India, modern coal and gas-fired power plants are being built alongside the expansion of renewables to meet the rapidly growing demand for electricity. Thus, the global energy transition is entering a phase where new records in "green" generation go hand in hand with the need to modernize infrastructure and energy storage. Despite commitments made by many governments to achieve carbon neutrality by 2050–2060, in the short term, traditional energy sources remain an essential part of the balance, ensuring energy system stability during the transition period.
Coal: Stable Demand Supports the Market
Despite the rapid development of renewable sources, the global coal market in 2025 maintained significant volumes and remains a key part of the global energy balance. Demand for coal products remains consistently high, especially in the Asia-Pacific region, where industrial growth and energy needs demand extensive use of this fuel. China – the world's largest consumer and producer of coal – approached record burning levels again last year. Annual production at Chinese mines exceeds 4 billion tons, covering a lion's share of domestic needs. However, this is barely adequate to satisfy peak demand, especially during extreme hot summer months (when energy systems are under increased load due to air conditioning use). India, possessing sizable coal reserves, is also increasing its usage: over 70% of the country's electricity continues to be generated by coal-fired plants, and overall coal consumption grows alongside the economy. Other developing economies in Asia (Indonesia, Vietnam, etc.) have ramped up coal production and exports in recent years, occupying a niche that has opened up in the market, which has helped to maintain relative stability in global prices.
Following the price shocks of 2022, energy coal prices have returned to more normal levels. In 2025, coal prices fluctuated within a narrow range, reflecting a balance between high demand in Asia and rising supply from leading exporters. Many countries have announced plans to reduce coal usage in the future to meet climate goals, yet in the short term, this fuel type remains largely irreplaceable. For billions of people worldwide, electricity from coal plants still provides basic stability in energy supply, especially where alternatives are lacking. Experts agree that in the coming 5–10 years, coal generation – especially in Asia – will remain a significant component of energy systems. Only as energy storage technologies continue to decrease in cost and reserve capacities develop can a noticeable reduction in coal's share be expected on a global scale. Currently, however, the coal market is supported by persistent high demand, ensuring its relative price stability even amid the "green" push of developed countries.
The Russian Oil Products Market: Extension of Measures for Price Stabilization
In the domestic fuel market of Russia, measures aimed at keeping prices stable and preventing shortages continue to be implemented at the start of 2026. Following a sharp spike in gasoline prices last summer, the situation has somewhat normalized; however, authorities do not lessen their control. The government has extended the current export ban on automotive gasoline and diesel fuel until the end of February 2026 to preserve additional resource volumes for domestic consumers during the winter months. Recall that a complete embargo on fuel exports was first introduced in the fall of 2025 during the peak of the crisis in the exchange market and has since been extended in several phases. Simultaneously, starting January 1, excise taxes on gasoline and diesel increased by 5.1%, slightly raising the tax burden on the industry, although the damping mechanism and direct subsidies to refiners are maintained. These subsidies compensate companies for lost revenue and encourage them to direct sufficient product volumes to the domestic market, keeping wholesale prices in check.
- Export Control: The complete ban on the export of gasoline and diesel fuel from Russia has been extended until February 28, 2026. This measure is expected to increase fuel supply in the domestic market by at least 200–300 thousand tons per month, which were previously exported.
- Financial Support: The damping mechanism and subsidies to oil companies, allowing partial compensation of the difference between domestic and foreign prices, have been retained. Thanks to this, refineries have the economic incentive to prioritize fuel supply to gas stations within the country, and retail price increases remain moderate.
- Monitoring and Response: Relevant agencies (Ministry of Energy, FAS, etc.) monitor the situation with fuel production and supplies daily. Increased control over the operation of refineries and the distribution of gasoline across regions has been implemented. If necessary, authorities are prepared to promptly deploy reserves or introduce new restrictions to prevent local disruptions. This was recently confirmed by an incident at the Ilsky refinery in the Krasnodar Territory: after infrastructure damage due to drone debris, emergency services quickly extinguished the fire, preventing any market impacts.
The combination of these measures has already yielded results: wholesale exchange prices for fuel have moved away from peak values, gas stations across the country are stocked with fuel, and retail price increases over the past year have amounted to only a few percent, close to the level of inflation. The authorities intend to continue proactive measures, especially during the sowing and harvesting campaigns in 2026, when demand for fuel typically rises seasonally. The situation in the Russian oil products market is under constant government control – any signs of a new price spike will be met with additional interventions. Such efforts are aimed at ensuring a stable fuel supply for the economy and the population at acceptable prices, despite external challenges and the volatility of the global oil market.
