Oil, Gas, and Energy Sector News – Saturday, 3 January 2026: Sanction Stalemate Persists; Oil Surplus Pressures Market; Stability in Gas Supplies; Records for Green Energy
The latest developments in the fuel and energy complex as of 3 January 2026 capture the attention of investors with a combination of market stability and geopolitical tension. Following a challenging year, the global oil market enters the new year showing signs of oversupply: Brent crude prices hover around $60 per barrel (almost 20% below levels from a year earlier), reflecting cautious sentiment and OPEC+'s efforts to maintain balance. The European gas market displays relative resilience at the mid-point of winter, with underground gas storage in the EU remaining over half full, providing a buffer amid moderate demand growth in the cold. Against this backdrop, gas exchange prices remain relatively low, easing energy costs for industry and consumers in Europe.
Meanwhile, the global energy transition is gaining momentum: many countries have reported new records for generation from renewable sources, and investments in clean energy continue to rise. However, geopolitical factors still introduce uncertainty—the sanctions standoff surrounding Russian energy exports remains strong, forcing major consumers like India to rethink supply routes. In Russia, authorities have extended emergency regulatory measures for the domestic fuel market, aiming to prevent further price spikes. Below is a detailed overview of key news and trends in the oil, gas, electricity, and raw materials sectors as of this date.
Oil Market: Oversupply and Cautious Price Corridor
Global oil prices maintain a relatively stable yet reduced level at the start of the year. The North Sea Brent is trading around $60 per barrel, while American WTI is close to $57–58. These levels are significantly lower than last year's values, reflecting a gradual market softening following the price peaks of previous years. In 2025, OPEC+ countries partially lifted production restrictions, which, combined with increased output from the USA, Brazil, and Canada, has led to a rise in global supply. For 2026, a surplus of oil is projected—according to the International Energy Agency, production could exceed demand by nearly 4 million barrels per day. OPEC+ participants remain cautious: the alliance has agreed to maintain production at current quotas for the first quarter, pausing any further increases. This approach aims to prevent price crashes, but the potential for price growth is limited, with extensive stockpiles on land and record volumes on tankers in transit indicating market saturation.
A significant role in price formation is played by China, the largest oil importer. Last year, Beijing actively leveraged strategic purchases, acquiring surplus crude when prices dropped and cutting imports when prices rose. Thanks to this flexible approach, prices held within a narrow corridor of around $60–65 per barrel during the second half of 2025. At the end of the year, Chinese companies again ramped up purchases of cheap oil to replenish stocks. As a result, although there is a formal oversupply of oil on the market, a considerable portion is still absorbed by China, thus setting a 'floor' for prices. However, the potential for further accumulation is not limitless—China's storage facilities are already filled with hundreds of millions of barrels, and in 2026, Beijing's strategy will be one of the determining factors for oil prices. Investors will closely monitor whether China continues to buy up surplus oil, sustaining demand, or slows imports, which could increase pressure on prices.
Gas Market: Robust Reserves Before Continued Winter
The gas market is displaying relatively favourable trends for consumers. European countries entered winter with high reserves: by early January, EU underground gas storage was filled to approximately 60–65%, slightly below record levels from a year ago but significantly higher than historical averages. A warm start to the winter season and energy conservation measures have reduced gas withdrawals from storage, maintaining a solid reserve for the continuing cold. Additionally, stable liquefied natural gas (LNG) supplies continue to compensate for the nearly complete cessation of pipeline deliveries from Russia. In 2025, Europe increased LNG imports by a quarter, primarily due to ramping up exports from the USA and Qatar, having launched new receiving terminals. Additional LNG volumes and moderated demand keep gas prices in Europe within a restrained range—around $9–10 per MMBtu (approximately €28–30 per MWh for the Dutch hub TTF), which remains drastically lower than the peak values seen during the 2022 crisis.
This year, experts anticipate a stable situation in the European gas market unless extreme cold or unforeseen events occur. Even in the event of a cold snap, Europe is far better prepared than two years ago: reserves are substantial, and LNG suppliers have excess capacity for rapid shipment increases. Nonetheless, demand in Asia remains a risk factor—should economic activity in China or other Asia-Pacific countries accelerate, competition for LNG shipments could intensify. For now, the balance in the gas market looks solid, and prices are held at moderate levels. This scenario favours European industry and energy sectors by reducing costs and allowing for an optimistic outlook for the remainder of the winter period.
International Politics: Sanction Pressure and Trade Restrictions Remain Firm
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 noticeable results by early 2026. Direct agreements in the oil and gas sector have not materialised, and the sanctions regime remains fully in place. Moreover, signals from Washington regarding the potential tightening of restrictions are becoming increasingly pronounced. The American administration links the lifting of certain sanctions to progress in resolving political crises and is prepared to implement new measures in their absence. For instance, the imposition of a 100% tariff on products exported to the USA from China is being discussed if Beijing does not curtail imports of Russian oil. Such statements heighten market anxiety, although they remain at the rhetorical level for now.
A recent incident is illustrative: at the end of December, the USA detained and confiscated a shipment of oil transported by a Panama-flagged tanker, which was allegedly destined for China and was of Iranian-Venezuelan origin. This case showcased Washington's determination to block channels used to evade sanctions, even if it necessitates asserting control 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 petroleum products from Russia. Collectively, these factors indicate that the sanctions standoff is entering a new phase with no signs of easing. The current situation compels energy resource-importing countries to seek flexible solutions—diversifying sources, utilising shadow tanker fleets, transitioning to transactions in national currencies—to ensure fuel supply in the face of ongoing political pressure. Global markets, in turn, are pricing in a premium for these risks and are closely monitoring the further development of dialogue between powers.
Asia: India and China Balancing Between Imports and Domestic Production
- India: Faced with tightening Western sanctions, New Delhi is compelled to approach oil procurement flexibly. The sharp reduction of imports of Russian energy resources at Washington's behest remains unacceptable to the nation—Russian oil and gas remain critically important for satisfying the economy's needs, accounting for over 20% of Indian crude oil imports. Nonetheless, due to sanction pressures and logistical issues, Indian refineries slightly reduced their purchases from Russia at the end of 2025. According to industry analysts, Russian oil deliveries to India fell to approximately 1.2 million barrels per day in December— the lowest level in the past three years (compared to a record ~1.8 million barrels per day a month earlier). To offset this decline and safeguard against shortages, India's largest refining corporation, Indian Oil, has engaged an option agreement for a shipment of oil from Colombia, and additional supplies from Middle Eastern and African countries are being explored. Simultaneously, India continues to secure preferential conditions—Russian suppliers are providing significant discounts (estimated at around $4–5 per barrel of Urals compared to Brent prices), which helps maintain the attractiveness of Russian barrels even under sanctions pressure. In the long term, New Delhi is increasing investments in exploration and production on its own territory. Notably, a large-scale programme for developing deep-water 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 enhance India's energy independence, although in the coming years the country will remain heavily reliant on imports—over 85% of consumed oil is sourced from abroad.
- China: The largest economy in Asia continues to balance between increasing domestic production and enhancing energy imports. Beijing has not joined Western sanctions against Moscow and has leveraged the situation to increase its purchases of Russian oil and gas at attractive prices. By the end of 2025, China's oil imports approached record levels—approximately 11 million barrels per day, only slightly below the 2023 levels. Imports of natural gas (both LNG and pipeline totals) also remain high, ensuring that industry and electricity generation receive fuel amid economic recovery. Concurrently, China is annually increasing its own production: in 2025, domestic oil output reached a record ~215 million tonnes (approximately 4.3 million barrels per day, +1% year-on-year), and gas production exceeded 175 billion cubic meters (+5–6% year-on-year). Growth in domestic resources helps cover part of the demand but does not eliminate the need for imports. Even with all efforts accounted for, China continues to import around 70% of its consumed oil and about 40% of gas. The Chinese government actively invests in the development of new fields, technologies for enhancing oil recovery, and expanding storage capacities for strategic reserves. In the long term, Beijing plans to continue increasing its 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 ensuring imports with the development of their resource base.
Energy Transition: Record Growth in Renewables and the Role of Traditional Generation
The global transition to clean energy reached new heights in 2025, and this trend is set to continue in 2026. In the European Union, total electricity generation from solar and wind power plants surpassed that from coal and gas-fired plants for the first time by the end of the year. The share of green electricity in the EU's energy balance is steadily increasing, thanks to the commissioning of numerous new capacities—after a temporary return to coal during the crisis years of 2022–2023, European countries are once again actively decommissioning coal plants and focusing on renewables. In the USA, renewable energy has also reached historic records: more than 30% of all the nation's output now comes from renewables, and in 2025 the total volume of electricity generated from wind and solar for the first time exceeded that from coal-fired generation. As the world leader in renewable capacity, China introduced tens of gigawatts of new solar panels and wind turbines in the past year, continuously breaking its own clean energy production records. In general, companies and governments worldwide are directing unprecedented funds towards low-carbon energy development. According to estimates from the International Energy Agency, total investments in the global energy sector surpassed $3 trillion in 2025, with more than half of these investments allocated to projects in renewables, grid modernisation, and energy storage systems.
Such rapid growth in renewable energy is transforming the market structure, but it also presents new challenges. The main challenge is ensuring the reliability of energy systems as the share of variable sources rises. In 2025, many countries faced the necessity of balancing the increased generation from solar and wind, while still relying on traditional capacities. For example, in Europe and the USA, gas-fired plants continue to play an important role as flexible backup capacity during peak loads or dips in renewable production. In China and India, the construction of modern coal and gas-fired plants continues alongside the expansion of renewables to meet the rapidly growing electricity demand. Thus, the global energy transition enters a phase where new records in green generation go hand in hand with the need to modernise infrastructure and energy storage. Despite the stated goals of many governments to achieve carbon neutrality by 2050–2060, in the short term, traditional energy carriers remain a critical part of the balance, ensuring stability in energy systems during the transition period.
Coal: Stable Demand Supports the Market
Despite the accelerated development of renewable sources, the global coal market in 2025 maintained significant volumes and remains a key component of the global energy balance. The demand for coal products remains consistently high, especially in the Asia-Pacific region, where industrial growth and electricity needs necessitate the widespread use of this fuel. China—the world’s largest consumer and producer of coal—again approached record levels of coal consumption last year. Annual production at Chinese mines exceeds 4 billion tonnes, covering a considerable portion of domestic demand. However, this is barely sufficient to meet peak demand, especially during extremely hot summer months (when energy system load increases due to air conditioning usage). India, holding substantial coal reserves, is also increasing its use: over 70% of electricity in the country is still generated from coal-fired plants, and absolute coal consumption is rising in line with economic growth. Other developing economies in Asia (Indonesia, Vietnam, etc.) have increased their production and export of thermal coal in recent years, filling the niche left open in the market, which has helped keep global prices relatively stable.
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 the balance between high demand in Asia and growing supply from leading exporters. Many countries have announced plans to reduce coal use in the future to achieve climate goals; however, in the short term, this type of fuel remains largely irreplaceable. For billions of people worldwide, electricity from coal-fired stations continues to provide basic stability in energy supply, especially where alternatives are limited. Experts agree that over the next 5–10 years, coal generation—particularly in Asia—will remain a significant component of energy systems. Only as energy storage becomes cheaper and reserve capacity develops can a noticeable decline in the share of coal on a global scale be expected. At present, the coal market is supported by the inertia of high demand, which provides relative price stability even amid the green agenda of developed nations.
Russian Oil Products Market: Extension of Measures to Stabilise Prices
In the early months of 2026, measures to maintain prices and prevent shortages continue to be implemented in the Russian fuel market. After a sharp price spike for gasoline last summer, the situation has somewhat normalised; however, authorities are not easing control. The government has extended the existing ban on the export of automotive gasoline and diesel fuel until the end of February 2026, in an effort to conserve additional resources for domestic consumers during the winter months. Recall that a total embargo on fuel exports was first introduced in the autumn of 2025 amid a crisis in the exchange market and has since been extended in several stages. Simultaneously, as of 1 January, excise taxes on gasoline and diesel fuel have risen by 5.1%, which will slightly increase the tax burden on the industry; however, the damping mechanism and direct subsidies for refiners remain in place. These subsidies compensate companies for lost revenues and encourage them to direct sufficient volumes of production 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 28 February 2026. This measure is expected to increase the supply of fuel in the domestic market by at least 200–300 thousand tonnes per month that was previously exported.
- Financial Support: The damping mechanism and subsidies for oil companies remain in place, allowing for partial reimbursement of the difference between domestic and external prices. This provides economic incentives for refineries to prioritise the allocation of fuel at filling stations within the country, while retail prices remain moderate.
- Monitoring and Response: Relevant authorities (Ministry of Energy, Federal Antimonopoly Service, etc.) are monitoring the situation regarding fuel production and supplies daily. Oversight of the operations of oil refining plants and gasoline distribution across regions has been intensified. Should any shortages arise, authorities are prepared to quickly utilise reserves or impose new restrictions to prevent local disruptions. This was recently reaffirmed by an incident at the Ilsky Oil Refinery in the Krasnodar region: following damage to infrastructure due to debris from a drone, emergency services swiftly extinguished the fire, preventing any impact on the market.
The culmination of these measures has already yielded results: wholesale exchange prices for fuel have moved away from peak values, filling stations across the country are supplied with fuel, and the rise in retail prices at filling stations over the past year has been only a few percent, which is close to inflation levels. Authorities intend to continue taking preventive measures, especially during the sowing and harvesting campaigns of 2026, when seasonal demand for fuel increases. The situation in the Russian oil products market is under constant government oversight—any signs of a new price spike will be met with additional interventions. These efforts are aimed at ensuring uninterrupted fuel supply to the economy and the population at acceptable prices, despite external challenges and market volatility.
