Oil and Gas and Energy News - Monday, 19 January 2026: A New Wave of Sanction Pressure, Oil Surplus and Record LNG Imports. Oil, Gas, Electricity, Renewable Energy, Coal, Oil Products, Refineries - Key Trends in the Global Energy Sector for Investors and Market Participants.
The beginning of 2026 is marked by the continuation of geopolitical confrontation and a large-scale restructuring of global energy resource flows, drawing the attention of investors and market participants. Western countries are not easing sanctions pressure on Russia: the European Union is preparing a new package of restrictions in the energy sector, aiming to completely abandon Russian oil and gas. At the same time, an oversupply persists in the global oil market — slow demand growth and the return of some producers (for instance, the gradual recovery of production in Iran and Venezuela) are keeping Brent prices around $60 per barrel. The European gas market is weathering the winter consumption peak thanks to record LNG imports and supply diversification (including new volumes of gas from Azerbaijan), which helps contain price increases even as Russian pipeline exports decline. The global energy transition is gaining momentum: in 2025, record capacities of renewable energy were introduced, although the stability of energy systems still relies on traditional resources. In Asia, demand for coal and hydrocarbons remains high, supporting the global commodities market, while in Russia, after last year's spike in gasoline prices, authorities are extending emergency restrictions on the export of oil products to maintain stability in the domestic fuel market. Below is a detailed overview of key events and trends in the oil, gas, energy, and commodity sectors as of this date.
Oil Market: Supply Surplus Limits Price Growth
Global oil prices at the start of 2026 are maintained at moderate levels due to the ongoing supply surplus. The benchmark Brent is trading around $60–65 per barrel, while the American WTI is in the range of $55–60. These price levels are approximately 10–15% lower than a year ago, reflecting a gradual correction after the peaks of the energy crisis of 2022–2023. The market has an oversupply of approximately 2–2.5 million barrels per day, as OPEC+ countries increased production in the second half of 2025 in a bid to regain lost market share. Additionally, the USA has increased supply (shale oil production remains at a high level), and volumes have partially returned from previously sanctioned countries — export capacities in Iran and Venezuela are improving after the easing of certain restrictions. However, global demand growth remains subdued: China's economic slowdown and energy-saving effects after high-price periods limit oil consumption growth. Analysts estimate that without a significant demand rebound or new actions from producers, prices could fall to $55 per barrel in the first half of 2026. The key factor is OPEC+ policy: if the alliance does not opt for production cuts and continues its current course, prices will remain under pressure. Major exporters are unlikely to allow a market collapse and could again limit supply if necessary to support prices. Geopolitical risks are also present but have not yet led to supply disruptions: a recent easing of tensions in the Middle East quickly removed the "premium" from prices, and oil quotes soon returned to previous levels. Thus, the oil market is nearing a balance, yet the balance is tilted in favour of buyers — excessive supply and moderate demand prevent significant price increases.
Gas Market: Winter, LNG, and New Routes Replace Russian Supplies
The European gas market has entered 2026 under radically new conditions — virtually without pipeline gas from Russia. As of 1 January, the EU's ban on most such supplies took effect, and Europe had prepared in advance for this step. EU countries filled underground gas storage (UGS) facilities to over 90% by the start of winter; by mid-January, stocks had reduced to about 55–60% of capacity, still above the average levels of previous years. Despite the severe cold, gas withdrawal from UGS is proceeding as planned, without panic, and market prices remain several times lower than peak levels in 2022.
The main reason for this stability is the record import of liquefied natural gas (LNG). European LNG terminals operated at maximum capacity in January: daily regasification volumes exceeded 480 million cubic metres, surpassing previous historical records. This influx of LNG compensates for the cessation of Russian transit and helps keep gas prices in check. Although spot prices in Europe increased by 30–40% at the beginning of the month due to the cold, they are still far from the extreme values seen during the energy deficit of 2022. To meet demand amid limited supplies from Russia, Europeans are relying on several directions:
- Maximising pipeline gas supplies from Norway and North Africa;
- Increasing LNG imports from the USA, Qatar, and other countries;
- Expanding the use of the Southern Gas Corridor (supplies from Azerbaijan to EU countries);
- Reducing domestic consumption through energy-saving measures and improvements in energy efficiency.
The combination of these measures allows Europe to relatively confidently traverse the current heating season even without Russian gas. Furthermore, Russia is redirecting its exports eastward: Gazprom reported record daily gas supply volumes to China through the Power of Siberia pipeline in January. Regarding the global market, seasonal demand increases are also felt in Asia: key importers in North-East Asia are ramping up LNG purchases, and the Asian JKM index has risen to approximately $10 per MMBtu (a peak for the last month and a half). Nevertheless, the global gas balance remains resilient: flexible redistribution of flows between regions and increased production (including in the USA, where Henry Hub prices remain around $3 per MMBtu) can meet the heightened demand. In the coming weeks, the gas market situation will largely depend on the weather: even if the cold persists, Europe has sufficient gas reserves and import capabilities to avoid a supply crisis.
International Politics: Sanctions, New Deals and Redistribution of Flows
The sanction confrontation between Moscow and the West evolves further in 2026. At the end of 2025, the EU approved its 19th package of measures, a significant portion of which was aimed at the Russian energy sector — the decision was made to lower the price ceiling on Russian oil from February 2026 and accelerate the abandonment of LNG imports from Russia (a ban on purchases from 2027). At the beginning of 2026, Brussels announced preparations for the next step: it is planned to legally prohibit the remaining volumes of Russian oil imports in EU countries, as well as implement the agreement reached to completely cease purchases of Russian pipeline gas. Concurrently, the United States and the European Union are enhancing oversight of compliance with existing restrictions: as early as last autumn, the US Treasury imposed additional sanctions against the oil companies Rosneft and Lukoil, while European authorities are tightening scrutiny of the tanker fleet transporting Russian oil in circumvention of established rules. For its part, Russia has extended its embargo on oil sales to countries participating in the price ceiling until 30 June 2026.
Exports of Russian oil and oil products remain at a fairly high level due to redirection towards Asia. China, India, Turkey, and several other countries continue to purchase Russian hydrocarbons at significant discounts to global prices. As a result, the global energy market is effectively divided into two parallel contours: a "Western" one, where sanctions and restrictions apply, and an alternative one, where Russian raw materials find buyers, albeit at reduced prices. Investors and traders closely monitor sanction policies, as any changes affect logistics and pricing conditions in the markets.
Simultaneously, the West's sanction strategy has shown elements of flexibility concerning individual countries. For instance, with the political changes in Caracas, the US has signalled a willingness to expedite the lifting of oil sanctions against Venezuela. International companies have already received expanded licences to operate in Venezuela: in the coming months, Chevron and other operators will be able to significantly increase oil exports from Venezuela. Moreover, Venezuela has signed its first contract for natural gas exports, opening a new chapter for its energy sector. Experts note that the recovery of Venezuela's oil and gas sector will be gradual — years of insufficient investment and sanctions have significantly curtailed its production capacities. Nevertheless, the very fact of the return of additional volumes from Venezuela to the market bolsters consumer confidence and exerts downward pressure on price growth expectations. The geopolitical situation in the Middle East has also noticeably calmed: by mid-January, unrest in Iran had subsided, and Washington's tough rhetoric regarding potential strikes against Iran had softened. Consequently, the risks of sudden supply disruptions of Middle Eastern oil have temporarily decreased. Thus, the beginning of 2026 is characterised by a contradictory influence of politics on energy markets: on one hand, sanction pressure on Russia remains high, while on the other, local de-escalation in some regions and targeted easing of restrictions (such as with Venezuela) create a more favourable backdrop than previously expected.
Asia: India and China Navigate Between Imports and Production Development
- India: Despite pressure from Western partners to reduce cooperation with sanctioned suppliers, Delhi has only moderately decreased its purchases of Russian oil and gas in recent months. A complete cessation of these resources is considered impossible due to their key role in national energy security. The country continues to receive raw materials from Russian companies on preferential terms: the discount on Urals oil for Indian buyers is around $4–5 to Brent prices, making these supplies very attractive. As a result, India remains one of the largest importers of Russian oil, while simultaneously increasing its purchases of oil products (such as diesel fuel) to meet growing domestic demand. Concurrently, the Indian government is intensifying efforts to reduce future import dependence. Prime Minister Narendra Modi has announced a large-scale programme for exploring deep-water oil and gas fields on the continental shelf. The state-owned ONGC is already drilling ultra-deep wells in the Bay of Bengal and the Andaman Sea; initial results are assessed as promising. This initiative aims to uncover new large hydrocarbon reserves and bring India closer to the long-term goal of energy self-sufficiency.
- China: Asia's largest economy continues to increase energy consumption, combining rising imports with growth in domestic production. Beijing has not joined the Western sanctions against Moscow and has taken advantage of the situation to increase purchases of Russian energy carriers on favourable terms. Analysts estimate that in 2025, China's oil and gas imports grew by 2–5% compared to the previous year, exceeding 210 million tonnes of oil and 250 billion cubic metres of gas respectively. The growth rates have slowed somewhat in comparison to the 2024 surge but remain positive. At the same time, China is setting records for domestic production: in 2025, national companies produced over 200 million tonnes of oil and around 220 billion cubic metres of natural gas, which is 1–6% more than the levels a year ago. The state is actively investing in the development of hard-to-recover fields, the implementation of new technologies, and the enhancement of oil yield from mature reservoirs. Nevertheless, due to the scale of the Chinese economy, dependence on imports remains substantial: about 70% of consumed oil and around 40% of gas must still be imported from abroad. In the coming years, these proportions are unlikely to change significantly. Thus, the two largest Asian consumers — India and China — continue to play a crucial role in global commodity markets, balancing the necessity of importing vast volumes of fuel with the desire to develop their own resource base.
Energy Transition: Renewable Energy Records and the Importance of Traditional Generation
The global transition to clean energy reached new heights in 2025, establishing important benchmarks for the industry. In many countries, record capacities of solar and wind generation were introduced, leading to historical maximums in output from renewable sources. In the European Union, by the end of the year, total generation from solar and wind power plants for the first time exceeded the output from coal and gas-fired power plants, cementing the shift towards "green" energy. In countries such as Germany, Spain, the UK, and others, the share of renewable energy in electricity consumption regularly exceeded 50% on specific days due to the introduction of new capacities. In the USA, renewable energy also reached record levels: in early 2025, more than 30% of all generation came from renewables, and the total volume of electricity produced from wind and solar exceeded production from coal-fired power plants. China remains the world leader in the scale of "green" construction — in 2025, the country introduced tens of gigawatts of new solar panels and wind installations, continually updating its records for clean energy production. Major oil, gas, and electricity corporations, considering these trends, continue to diversify their businesses: significant investments are directed towards renewable projects, hydrogen technology development, and energy storage systems.
However, the impressive progress in clean energy requires maintaining a balance with traditional generation. The past year has shown that during peak demand periods or adverse weather conditions (for instance, in winter during wind lulls and low solar generation), backup capacities from fossil fuels remain critically important for ensuring reliable energy supply. In Europe, which has significantly reduced its share of coal in recent years, particular coal plants were brought back online during severe cold spells, while gas power plants took on increased loads amid insufficient wind generation. In Asian countries, maintaining base coal generation safeguards the energy systems against disruptions during consumption spikes. As a result, while the world is rapidly moving towards cleaner energy, it remains far from complete carbon neutrality. The transition period is characterised by the coexistence of two models — the rapidly growing renewable and traditional thermal generation, which provide backup and cushion seasonal and weather fluctuations. Many countries' strategies involve the parallel development of renewable energy and modernising classic infrastructure, ensuring the resilience of energy systems on the path to a low-carbon future.
Coal: Asian Demand Keeps the Market at High Levels
Despite efforts to decarbonise, the global coal market continues to be characterised by significant consumption volumes and relatively stable prices. Demand for coal remains high, particularly in Asian countries. In China and India — the two largest consumers — this resource continues to play a crucial role in electricity generation and metallurgy. According to industry reports, global coal consumption in 2025 remained around historical highs, declining only by 1–2% compared to the record levels of 2024. Increased coal usage in developing economies offsets the reduction in its share within the energy balance of Europe and North America. Many Asian states continue to commission new highly efficient coal-fired power plants to meet growing demand for electricity from the population and industry.
The price situation in the coal market is currently calmer than during the peak of the energy crisis: thermal coal quotes at the beginning of 2026 are in the range of about $100–110 per tonne, significantly lower than the peaks two years ago. Price easing is facilitated by increased supply — leading exporters (Indonesia, Australia, South Africa, Russia, etc.) have ramped up production and exports, while consumption in Europe is decreasing as renewable energy develops and nuclear generation returns to operation. In Europe, the systematic phase-out of coal continues: a landmark event was the closure in January of the last deep coal mine in the Czech Republic, ending a 250-year history of coal mining in the country. Nevertheless, at a global level, coal remains an essential component of the energy balance for now. The International Energy Agency anticipates that global demand for coal will plateau in the coming years, followed by a gradual decline. In the long run, stricter environmental policies and competition from cheap renewable sources will limit the development of the coal sector. However, in the short term, the coal market will continue to rely on consistently high Asian demand.
The Russian Market: Export Restrictions and Fuel Price Stabilisation
Within Russia's domestic fuel and energy complex, unprecedented measures continue to be implemented to normalise the price situation. After wholesale prices for petrol and diesel skyrocketed to record levels in August 2025, the Russian government imposed a temporary ban on the export of key types of oil products. These restrictions have been repeatedly extended and now remain in force at least until 28 February 2026, covering the export of gasoline, diesel fuel, fuel oil, and gas oils. The cessation of exports has allowed substantial volumes of fuel to be redirected to the domestic market, significantly reducing exchange prices by winter. Wholesale prices for oil products have fallen by tens of per cent from their peak values, while retail price growth at gas stations has slowed — by the end of the year, it amounted to about 5%, fitting within the overall inflation framework. Thus, the fuel crisis has been largely contained: there is no shortage of gasoline at gas stations, panic demand has subsided, and prices for end consumers have stabilised.
However, the cost of these measures has been a reduction in export revenue for oil companies and the budget. Russian oil producers have had to compromise on lost profits to saturate the domestic market. Authorities claim that the situation is under control: production costs in most Russian fields are low, so even with Urals prices below $40 per barrel, major projects remain profitable. Nevertheless, the decline in export revenues — by the end of 2025, oil and gas revenues to the Russian budget decreased by about a quarter compared to the previous year — poses risks for launching new investment projects, which require higher global prices and access to external markets. The government does not provide direct compensations to companies but continues the operation of a damping mechanism (reverse excise tax), partially compensating lost revenues from domestic fuel sales.
Russia's fuel and energy complex is adapting to the new conditions of the sanction era. The main task for 2026 is to maintain a balance between restraining domestic energy prices and preserving export revenues, which are vital for replenishing the budget and financing sector development. The government emphasises that it is ready to extend restrictions on the export of oil products or introduce new instruments, if necessary, to prevent shortages and price shocks for the population. At the same time, measures to stimulate refining and seek new raw material markets are being developed. Currently, the adopted steps allow for stable fuel supply within the country and for maintaining prices at a consumer-friendly level. Monitoring the situation in the fuel sector remains a priority of state policy, as it is crucial for social and economic stability, and the resilience of Russia's oil and gas complex in the face of external pressure.
