Oil and Gas and Energy News — Saturday, January 17, 2026: Sanctions Tightening, Oil Surplus, and Diversification of Gas Supplies. Oil, Gas, Electricity, Renewable Energy, Coal, Oil Refineries — Key Trends in the Fuel and Energy Complex for Investors and Market Participants.
At the beginning of 2026, the fuel and energy complex is facing ongoing geopolitical confrontations and a significant restructuring of global energy resource flows. Western countries are intensifying sanctions against Russia — the European Union is implementing new restrictions on energy trade. Simultaneously, the world oil market is experiencing an oversupply: slowing demand and the return of certain producers (for example, Venezuela) are keeping the Brent price around $60 per barrel. The European gas market is undergoing historical changes: as of January, shipments of gas from Russia are virtually halted, but high reserves in EU gas storage and diversification of sources (from LNG to Azerbaijani gas) are currently ensuring price stability this winter. The energy transition is gaining momentum: 2025 marked a record capacity addition in renewable energy, although reliable operation of energy systems still requires reliance on traditional resources, while demand for coal and hydrocarbons remains high in Asia, sustaining the global commodity market. In Russia, after last year’s spike in gasoline prices, the authorities extended emergency export restrictions on petroleum products, striving to maintain stability in the domestic fuel market.
Oil Market: Global Surplus Keeps Prices in Check
Global oil prices at the start of 2026 remain relatively stable, holding within a moderate range. The benchmark Brent is trading around $60–65 per barrel, while U.S. WTI is in the $55–60 range. The market is experiencing a surplus supply of approximately 2.5 million barrels per day. This is due to OPEC+ countries increasing production in the second half of 2025, aiming to regain lost market shares. Additionally, U.S. oil production remains high, and the partial return of Venezuelan oil to the market after sanctions relaxation has boosted supply.
Demand for oil is growing at a slower pace. Economic slowdown in China and energy conservation effects following previous years of high prices are limiting global consumption growth. Against this backdrop, analysts predict that oil quotes could drop 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 cuts, prices will remain under pressure. Leading exporters are unlikely to allow a market crash and may reduce output again if necessary to support prices. Geopolitical risks are present but currently are not leading to supply disruptions.
Gas Market: Europe Seeks Alternatives to Russian Gas
The European gas market enters 2026 with a new reality: the virtual cessation of pipeline gas imports from Russia. According to the EU decision, a ban on these supplies took effect on January 1, depriving Europe of about 17% of its previous imports. EU countries proactively filled gas storage facilities to over 90%. Despite winter conditions, gas extraction from storages is proceeding in a controlled manner, with no sharp price spikes. Exchange prices for gas in Europe remain several times lower than the peaks of 2022, reflecting a relative market equilibrium.
To compensate for the loss of Russian gas volumes, the EU is focused on several measures:
- maximizing pipeline supplies from Norway and North Africa;
- increasing imports of liquefied natural gas (LNG) from the U.S., 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 navigate the current heating season relatively smoothly, despite the cessation of Russian supplies. At the same time, Russia is redirecting its gas exports to the East: Gazprom reported a new record for daily supplies to China through the Power of Siberia gas pipeline in early January.
International Politics: Sanctions and Energy
The sanction confrontation between Moscow and the West continues to escalate. At the end of 2025, the EU approved its 19th package of measures, a significant part of which targets the energy sector. Among them is a reduction of the price ceiling on Russian oil effective February 2026, and a decision to completely ban the import of Russian LNG by 2027. In response, Moscow extended its own embargo on oil sales to countries participating in the price ceiling until June 30, 2026.
Russian oil and petroleum product exports remain at a fairly high level, thanks to redirected flows to Asia, where China, India, Turkey, and other countries are purchasing crude at significant discounts. As a result, the global energy market has essentially split into two parallel frameworks — the western (sanctioned) and the alternative, where Russian hydrocarbons continue to find demand albeit at lower prices. Investors and market participants are closely monitoring the sanctions policy, as any changes impact logistics and pricing dynamics in commodity markets.
Energy Transition: Records and Balance
The global shift towards clean energy in 2025 was marked by unprecedented growth in renewable generation. Many countries introduced record capacities for solar and wind power plants. In the EU, about 85–90 GW of new renewable energy sources were added in a year, the share of renewable electricity in the U.S. exceeded 30%, and China launched dozens of gigawatts of "green" power plants, renewing its own records.
The rapid expansion of 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 required to cover demand peaks and prevent interruptions. Therefore, large-scale energy storage projects are actively being developed worldwide — large battery farms are being constructed, and technologies for storing energy in the form of hydrogen and other carriers are being researched.
BP's decision to reduce investments in renewable energy and write down several billion dollars of "green" assets has shown that even oil and gas giants must balance ecological goals with profitability. Despite the rapid growth of the renewable sector, traditional oil and gas business remains the primary source of profit. Investors demand a cautious approach: "green" projects need to be developed without jeopardizing financial stability. The energy transition continues, but the lesson from 2025 is the necessity for a more balanced strategy that combines accelerated deployment of renewables with the maintenance of energy system reliability and investment returns.
Coal: High Demand in Asia
The global coal market in 2025 remained on the rise, despite global goals to reduce coal usage. The primary reason is consistently high demand in Asia. Countries such as China and India continue to burn massive volumes of coal for electricity generation and industrial needs, offsetting declines in consumption in western economies.
China accounts for nearly half of global coal consumption and even with production exceeding 4 billion tons annually, it is compelled to increase imports during peak periods. India is also ramping up production, but due to rapid economic growth, it has to import significant volumes of fuel, primarily from Indonesia, Australia, and Russia.
High Asian demand keeps coal prices relatively elevated. Major exporters — from Indonesia and Australia to South Africa — have increased revenues thanks to stable orders from China, India, and other countries. In Europe, after a temporary surge in coal usage in 2022–2023, its share is again decreasing due to the development of renewable energy sources and the resumption of nuclear generation. Overall, despite the climate agenda, coal will retain a significant portion 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 restraining fuel price growth since autumn 2025. After wholesale gasoline and diesel prices reached record levels in August, a temporary export ban on key petroleum products was implemented, extended until February 28, 2026. The restrictions apply to the export of gasoline, diesel fuel, fuel oil, and gasoil, which have already yielded results: wholesale prices decreased by dozens of percent from peak levels by winter. The growth of retail prices has slowed down, and by the end of the year, the situation stabilized — gas stations are adequately supplied with fuel, and panic buying has disappeared.
For oil companies and refineries, these measures imply lost revenue, but the authorities are demanding that businesses "tighten their belts" for the sake of market stability. The cost of oil production at most Russian fields is low, so even an oil price below $40 remains non-critical for profitability. However, reduced export revenue jeopardizes the launch of new projects, which require higher global prices and access to external markets.
The government refrains from direct compensation for the sector, stating that the situation is under control and that the fuel and energy companies are still profitable even with reduced exports. The domestic fuel and energy sector is adapting to new circumstances. The main task for 2026 is to maintain a balance between suppressing internal prices for energy carriers and supporting export revenues, which are vital for the budget and sector development.
