News from the oil, gas and energy sector for Friday, 23 January 2026: Global oil and gas market, electricity generation, renewable energy, coal, oil products, key trends and events in the global fuel and energy complex.
The global fuel and energy complex (FEC) market is witnessing a revival as of 23 January 2026. Oil prices are rising against the backdrop of new data and developments, while gas prices in Europe are surging due to anomalous cold weather. The energy sector is experiencing significant changes, with a focus on Venezuela's return to the oil market, the surge in EU gas prices, and record-setting trends in electricity generation. Below is an overview of the key events in the oil, gas, and energy sector that are relevant for investors and participants in the global FEC market.
Global Oil Market: Price Trends and Supplies
Global oil prices continued their moderate rise, with March futures for Brent hovering around $65 per barrel following the release of US inventory data and amid restricted supplies. Although oil prices declined by approximately 18% in 2025 due to fears of market oversaturation, there is a relative stabilization in the new year. Key OPEC+ countries are adhering to agreements to maintain limited production; eight leading exporters in the alliance have previously decided to freeze planned oil production increases for the first quarter of 2026 in a bid to support supply-demand balance after a period of price decline.
Various factors are influencing the oil market in different directions. On one hand, an unexpected supply cut has emerged: oil production at Kazakhstan's largest field, **Tengiz**, has been temporarily halted due to a technological incident. The field operator declared force majeure, canceling shipments of approximately 700,000 tonnes of oil in January-February. This will lead to a temporary reduction in the export of Caspian oil through the CPC pipeline, which slightly supports prices. On the other hand, new sources of crude are emerging in the market: the United States is effectively easing sanctions against Venezuela. The American company Valero Energy has purchased the first batch of Venezuelan oil—its first in years—under agreements between Washington and Caracas. The return of Venezuelan oil to the global market after a prolonged absence is increasing the availability of crude and may intensify competition for market share in the future.
Overall, the oil market is now balancing between OPEC+'s efforts to maintain prices and the influx of additional oil supplies. Despite sanctions pressure, global producers are maintaining high production levels. For instance, oil production in Russia in 2025 remained at approximately 516 million tonnes, the same as the previous year, indicating the flexibility of oil companies in redirecting export flows. As oil prices remain within a relatively narrow corridor, investors in oil companies are assessing risks: on one hand, limited supply and geopolitical factors are supporting quotes; on the other, possible demand slowdowns and the influx of new supplies (from Venezuela, Guyana, increased production in Brazil, etc.) could constrain price growth.
Gas Market: European Prices Soar Amid Cold Weather
The European gas market is experiencing a sharp price spike this winter. Anomalous cold weather and energy factors have led spot prices for gas in the EU to approach the psychological threshold of $500 per thousand cubic metres. At the Dutch TTF hub, gas prices surged by more than 10% within 24 hours, reaching their highest levels since mid-2025. The primary cause is the severe drop in temperatures: January has been one of the coldest in Europe in the last 15 years, several degrees below normal. Frosty, clear, and windless conditions have reduced wind energy generation, increasing reliance on gas-fired power plants and the energy system.
Simultaneously, gas inventories in Europe are depleting rapidly. The average filling level of European gas storage facilities has already dropped to around 48-49%, nearly 15 percentage points below the multi-year average for this time of season. In other words, gas is being drawn from storages at a faster pace than usual, with withdrawals currently on a trajectory that surpasses previous years by approximately a month. If cold weather persists, there is a risk that gas storage levels could reach minimum values by the end of winter, thus increasing market volatility.
- Supply restrictions: Since early 2025, Europe has lost transit of Russian gas through Ukraine, which has reduced pipeline deliveries. Efforts have been made to compensate for the shortfall by increasing liquefied natural gas (LNG) imports.
- Record LNG imports: In 2025, European countries purchased around 109 million tonnes of LNG (approximately 142 billion cubic metres post-regasification)—a 28% increase compared to the previous year. In January 2026, LNG imports could reach a record 10 million tonnes (+24% year-on-year), while terminal capacities were only half utilised, indicating that infrastructure still has room to expand LNG receiving capabilities.
- System load: High gas withdrawal for heating and electricity generation, coupled with reduced wind generation, has exposed vulnerabilities in the energy system. European utilities are forced to burn more gas to maintain electricity supplies, relying on storages as the most flexible reserve. Simultaneously, gas prices have also risen in the US—one of the key LNG suppliers—which somewhat limits the ability to ramp up American fuel exports to Europe swiftly.
Looking ahead, the situation in the gas market will depend on weather conditions and global supply. Should February and March be milder, price growth may halt, allowing Europe to stabilise storage levels. Nevertheless, the current spike creates a "long tail" effect: the EU will need to replenish depleted storages at an accelerated pace in summer 2026. This suggests that the demand for LNG in the global market will remain elevated, at least in the coming months. Analysts also note that new large-scale LNG projects in North America and the Middle East are expected to enter the market in the medium term, which could ease the pricing situation by 2027. However, for the moment, European gas consumers are entering the end of the winter season with heightened risk of shortages, and the market requires flexibility and additional fuel volumes for stabilisation.
Electricity and Renewable Energy: Record Share and Coal Decline
The global electricity sector continues to see a strengthening trend towards clean energy sources. Renewable energy sources (RES) have set a new record in the European energy balance: by the end of 2025, the combined share of wind and solar generation in the EU surpassed the share of electricity produced from fossil fuels for the first time. Wind and solar power plants contributed approximately 30% to electricity generation in the EU, while coal and gas stations accounted for about 29%. This symbolic shift indicates that green energy has become a leading force in Europe, surpassing fossil sources in generation output.
Positive shifts are not limited to Europe. For the first time in over half a century, a simultaneous decline in coal power generation has been recorded in the two largest developing economies—China and India. Industry analysis indicates that in 2025, coal-fired power plants in China and India produced less energy than the previous year, facilitated by record additions of RES capacity. Growth in solar and wind installations in these countries has sufficiently covered the increase in electricity demand, thereby reducing the need for coal. This moment is deemed historic: the synchronous decline in coal generation in the two largest coal-importing countries suggests the onset of structural changes in the Asian energy sector.
- Record investments: Global energy companies and investors are directing significant resources towards the development of RES. There is a continued increase in capacities for solar and wind energy around the world, supported by government initiatives and private capital. Many oil and gas corporations have announced plans to diversify their businesses, investing in solar and wind projects, energy storage, and hydrogen production.
- Decline of the coal industry: Although in some regions (e.g., Southeast Asia) demand for coal remains temporarily high, there is a global trend towards a reduction. G7 nations and many developing economies are aiming to phase out coal generation over the coming decades. The diminishing role of coal contributes to lower emissions and stimulates demand for gas and RES as less carbon-intensive sources.
- Challenges for the electricity sector: The growing share of renewable generation necessitates the upgrade of energy systems. For instance, a recent cold spell revealed that in the absence of wind, load transfers back to traditional generation, particularly gas. To ensure stable electricity supply, countries are investing in energy storage systems, the development of "smart" grids, and backup capacity, thereby enhancing supply reliability amidst the variability of renewable sources.
Overall, the energy transition is deepening. The year 2025 was one of the warmest on record and simultaneously a year of record growth in clean energy. This confirms the inseparable link between climate goals and the restructuring of the energy sector. The global trend for the electricity market indicates a continued rise in RES share, while traditional forms of generation (coal, and potentially gas) will occupy a progressively narrowing niche. Energy investors are considering these changes, favouring sustainable and environmentally friendly projects, which also impacts the capitalisation of companies in the sector.
Energy Geopolitics and Sanctions: New Strikes and Adaptation
Geopolitical factors continue to exert a strong influence on oil and gas markets. In 2026, sanction pressure on traditional energy resource exporters is expanding, while local concessions are emerging for some countries. In the United States, a new sanctions package aimed at the Russian fuel and energy sector is under discussion: the so-called "Russia Sanctions Act – 2025" includes the imposition of 500% tariffs on the trade of oil, gas, coal, oil products, and uranium of Russian origin for any countries continuing such transactions. The Donald Trump administration suspended this bill last year; however, in January 2026, signals emerged indicating readiness to revisit its consideration, under the condition that such harsh measures would only be applied when necessary. Nevertheless, even the threat of such tariffs is already affecting buyer behaviour toward Russian crude.
India, which previously became the largest importer of Russian oil, has noticeably reduced its purchases. Market data indicate that shipments of Russian oil to Indian refineries at the beginning of 2026 have decreased almost by half compared to peak volumes in mid-2025. This decrease followed intensified pressure from Washington: in August 2025, the US raised tariffs on Indian goods by 25%, and in October imposed sanctions on several large Russian energy companies. Consequently, Indian refineries have diversified their sourcing, reducing reliance on Russia. Similarly, several other countries are acting in the same manner: fearing secondary sanctions, they are decreasing cooperation with Moscow in the oil and gas sector. Many Western fuel companies and traders have exited the Russian market altogether, forcing Russia to redirect its exports to friendly jurisdictions (China, Turkey, the Middle East, Africa) and offer discounts on its oil.
European Union countries continue to uphold a sanctions policy in the energy sector. In compliance with the oil embargo and price cap, the EU has strengthened its oversight of sanctions compliance. For example, on 22 January, France detained a tanker carrying Russian oil in the Mediterranean Sea, suspecting it of violating sanctions requirements. President Emmanuel Macron stated that the operation was conducted in conjunction with allies and demonstrates Europe’s resolve to combat circumvention of imposed measures. The detained vessel has been redirected to port for further investigations; this precedent serves as a signal to the market that European regulators will strictly curtail unauthorized exports of oil and oil products from Russia.
At the same time, the global sanctions opposition is taking on a selective character. Alongside its firm stance on Russian energy resources, Washington is making overtures to other players: as noted, the US has eased restrictions on Venezuela, partially allowing Venezuelan oil to enter the global market in exchange for political concessions. Furthermore, the US administration in January 2026 announced the introduction of additional 25% tariffs for countries continuing cooperation with Iran in the oil and gas sector—this is part of a strategy to exert pressure on Tehran. Thus, the geopolitical landscape is complex: some supply channels are being closed while others are being opened. The energy market is adapting to the new realities: alternative logistics chains are emerging, "shadow" tanker fleets are developing to circumvent restrictions, and new trading partnerships are forming. In the short term, sanctions create uncertainty and regional supply imbalances—for instance, Europe and the US are tightening control over Russian exports, while Asia is capitalising on discounts. However, in the long term, participants in the FEC market are seeking stability: even under sanctions, Russian oil exports remain close to pre-crisis levels, and global oil and gas flows are gradually readjusting, reducing the system's vulnerability to political factors.
Market Outlook: Demand, Investments, and Energy Transition
Forecasts for the oil and gas sector in 2026 reflect cautious optimism. According to estimates from the International Energy Agency (IEA), global oil demand in 2026 will reach approximately 104.8 million barrels per day—only 0.8% more than in 2025. The slowdown in growth rates is attributed to modest economic growth and energy-saving measures. In developed countries, oil demand is stagnating or declining structurally; for example, petroleum consumption in Europe and Japan remains at multi-year lows, while in the US—the largest consumer—overall oil consumption is expected to stay close to 2025 levels. The main increase in demand is shifting to developing economies in Asia, the Middle East, and Africa, with China remaining the leader. However, even in China and India, demand is growing less dynamically than previously forecasted, partly due to accelerated electrification and the penetration of RES.
On the supply side, however, there may be a more substantial increase. Non-OPEC+ producers plan to raise production; by 2026, collectively non-OPEC supplies could increase by more than 1 million barrels per day. Much of this new volume is expected to come from projects in the Western Hemisphere. In Brazil, large offshore pre-salt oil fields are expected to continue ramping up production, with EIA forecasting an increase of around 0.2 million barrels per day (to 4 million barrels per day). New players are also entering the arena: Guyana is ramping up exports from its newly developed offshore blocks, while Canada is expanding oil production from tar sands, and the US shale sector remains resilient even at moderate oil prices due to improved efficiency and cost reduction. These factors could lead to potential oversupply in the global oil market. Major investment banks have already adjusted their price forecasts: for instance, Goldman Sachs anticipates that the average annual price of Brent in 2026 will be around $56 per barrel, while JPMorgan analysts predict a range of $57-$58 per barrel for Brent in 2026-2027. This is significantly lower than early-year levels, signalling a probable shift in balance towards buyers unless new force majeure events occur.
The gas market is also trending toward a state of oversupply in the medium term. According to industry reviews, significant LNG production capacities in the US, Qatar, and East Africa are set to come online in 2026-2027. This wave of new LNG might lead to a situation where buyers dictate terms in the gas market—especially in Asia and Europe, where demand growth for gas is expected to slow down due to high bases from previous years and climate policies. Experts believe that after the current winter surge in prices, there may be a relative easing of gas prices by the end of 2026: additional volumes of LNG and reservoir recovery will reduce the risk of shortages. Nevertheless, the gas market will remain volatile: anomalous weather conditions, competition for resources between Europe and Asia, and geopolitics (for example, the situation surrounding gas exports from the Eastern Mediterranean or Central Asia) will occasionally prompt price fluctuations.
Investments in the energy sector remain at a high level despite all transformations. Major oil and gas powers are signalling large investments in the sector. For instance, Russia plans to invest around 4 trillion rubles in developing petrochemicals and oil refining by the end of the decade (this estimate was announced by Deputy Prime Minister Alexander Novak). Similarly, countries in the Middle East (Saudi Arabia, UAE, Qatar) are implementing mega-projects to expand oil refining capacities and liquefied natural gas production, striving to monetise resources before the peak of global demand. Concurrently, increasing funds are also being directed towards clean energy: global investments in renewable projects, energy efficiency, and electric transport are reaching new highs. Traditional oil and gas companies face a choice—whether to increase returns from existing fields and refineries or pivot towards new energy markets. In practice, most energy holdings are balancing these tasks, investing both in oil and gas extraction and in low-carbon sectors.
Thus, the beginning of 2026 presents a mixed picture for investors and participants in the FEC market. On one hand, the oil and gas sector continues to generate significant profits and remains the backbone of global energy supply—demand for oil and gas, albeit growing slowly, is close to record levels in absolute terms. On the other hand, the structural shift towards clean energy sources is accelerating, gradually transforming the industry. Oil and gas markets will closely monitor the balance in the coming months: whether OPEC+ will have the resolve to prevent oversaturation, how quickly global LNG will cover new needs, and what steps major economies will take in energy policy. Uncertainty in the industry remains high in 2026, but this also creates new opportunities—ranging from advantageous raw material purchases during price drops to investments in innovative energy projects. Market participants, whether oil and fuel companies or financial investors, are adapting to a new reality where business resilience is defined by the ability to respond to geopolitical challenges and readiness for the energy transition. Ultimately, the global fuel and energy complex begins 2026 in a state of fragile equilibrium, signalling the need for thoughtful strategic decisions to maintain stability and growth.
