Energy and Oil & Gas News for Thursday, January 29, 2026: Global Oil and Gas Market, Electricity, Renewable Energy, Coal, Refineries, and Key Trends in the Energy Sector for Investors and Energy Industry Participants.
The global fuel and energy complex (FEC) is facing new challenges amid extreme winter cold and geopolitical tensions. Investors and market participants are closely monitoring the situation, assessing the impact of weather disasters, sanctions policies, and the energy transition on the oil and gas sector and electricity generation.
- An extreme winter storm in the U.S. has temporarily disrupted up to 15% of oil production and significantly reduced natural gas output.
- Oil prices (Brent ~ $65/bar.) remain stable; OPEC+ signals the continuation of current production limits.
- The escalation of the U.S.–Iran conflict raises supply disruption risks, despite ongoing peace talks regarding Ukraine.
- Natural gas prices in North America and Europe have surged amid freezing temperatures; gas stocks in the EU have fallen to multi-year lows.
- Renewables have reached a record share in Europe’s electricity generation, but weak networks and harsh winters have highlighted the need for reserve capacity.
- The U.S. is easing sanctions against Venezuela following a change in leadership, opening the door for increased heavy oil exports to the global market.
Oil: U.S. Storm and Price Stability
In the U.S., a powerful winter storm led to a temporary halt of up to 2 million barrels per day in oil production (around 15% of the national level). The main hit was in the Permian Basin, but production began to recover within days. Against this backdrop, oil prices stabilized after a spike earlier in the week: Brent is holding at around $65 per barrel, WTI at roughly $60. Despite temporary disruptions, both benchmark grades maintained a rise of about 2–3% for the week.
Extreme cold has also impacted oil refining. Several large U.S. refineries reduced operations due to equipment freezing, prompting a spike in fuel prices—especially for diesel and heating oil. Nevertheless, a significant fuel shortage was averted thanks to reserves and the prompt resumption of operations as temperatures rose.
Global oil supply is returning to previous levels. In Kazakhstan, production is resuming at the largest field following repairs to the export pipeline, which will increase shipments of Caspian oil. Ahead of the next meeting, OPEC+ members are signaling their commitment to the current quotas, indicating no plans to increase production in March. Thus, despite natural disasters, the global oil market remains relatively balanced.
Geopolitical Risks: Iran, Sanctions, and Negotiations
Geopolitical tensions keep the energy market in uncertainty. The conflict between the U.S. and Iran has escalated: President Donald Trump announced the deployment of a "fleet" to the shores of Iran and threatened measures for suppressing protests and Tehran's nuclear ambitions. In response, Iran vowed to treat any attack as a "total war." Such statements add a risk premium to oil prices, as traders fear supply disruptions from the Middle East.
In parallel, cautious optimism is stemming from ongoing negotiations among Russia, Ukraine, and the U.S. Successful dialogue could lead to a gradual easing of Western sanctions against the Russian oil and gas sector, altering the configuration of global energy flows. For now, however, the sanctions regime remains stringent: exports of Russian oil and gas are constrained by price ceilings and are largely redirected to Asia. Investors continue to assess geopolitical risks, focusing on both Middle Eastern events and potential shifts in sanctions policy.
Natural Gas: Frost and Price Surge
The natural gas market has come under pressure from extreme cold. In the U.S., winter storms resulted in mass "freezing" of wells, temporarily halting up to 16% of gas production—more than during the 2021 crisis. Daily gas production dropped from approximately 110 to 97 billion cubic feet (from 3.1 to 2.7 billion cubic meters), prompting a sharp price surge. Henry Hub futures skyrocketed more than double, exceeding $6 per million British thermal units (MMBtu), equating to around $210 per thousand cubic meters. As temperatures moderate, prices have retreated, but the situation remains extremely volatile and weather-dependent.
Europe is also facing a gas shortfall. By mid-winter, European storage was depleted to less than 50% capacity (the lowest in recent years), as prolonged cold weather sharply increased gas withdrawals. Spot prices in the EU soared to ~$14 per MMBtu (about $500 per thousand cubic meters), reaching a multi-month high. An important factor has been supply: LNG exports from the U.S. temporarily fell by nearly half due to terminal issues, limiting gas inflows to Europe and driving prices up. Some LNG cargoes have been redirected to the domestic U.S. market for higher returns, exacerbating the situation in the global market.
In the coming weeks, gas prices in Europe will depend on weather conditions. If February proves relatively mild, the market will gain respite, although gas reserves by the end of winter will still be significantly below normal levels. EU governments and companies will need to actively replenish storage during the inter-season, competing for LNG in the global market. Analysts warn that a new cold wave or supply disruptions could trigger another price surge, as the global gas market has become more interconnected and sensitive to local disturbances.
Electricity and Coal: Strain on Networks
Energy systems in the Northern Hemisphere are experiencing increased strain. In the U.S., the operator of the largest eastern power grid (PJM) declared a state of emergency: daily consumption peaked over 140 GW, threatening rolling blackouts. To maintain balance, authorities had to deploy backup diesel generators and oil-fired power stations until the end of January. This helped avoid a blackout but required burning more oil and coal instead of gas. Amid Arctic cold, generation from wind and solar stations sharply declined, thus traditional (hydrocarbon) capacities had to be maximally utilized to meet demand.
A similar picture emerges in Europe: electricity demand surged, and several countries temporarily brought coal plants back online to manage peaks. Although coal's share in the EU's electricity generation fell to a record low of 9.2% in 2025, its usage locally increased during this winter. Simultaneously, infrastructure limitations became evident: insufficient network capacity has forced a curtailment of wind farm outputs at peak production, leading to missed cheap energy and price increases at other times. Experts urge accelerated modernization of power grids and the adoption of storage systems to enhance the resilience of energy systems and decrease reliance on coal in emergencies.
Growth of Renewables and Energy Transition
The transition to clean energy is continuing at an accelerated pace. In 2025, EU countries generated more electricity from wind and solar (30% of generation) than from all fossil sources combined (29%). Overall, low-carbon sources (renewables and nuclear) accounted for 71% of electricity generation in the EU. This record output was supported by the commissioning of new capacities: the total installed capacity of solar parks grew by 19% year-on-year. In some countries (Spain, Netherlands, Hungary, and others), solar energy already covers more than one-fifth of national consumption.
Despite these successes, Europe faces challenges regarding energy costs and network constraints. Price increases in 2025 coincided with peak usage periods of gas plants and forced curtailments of some wind farms due to network overloads. To lower costs and ensure stable integration of renewables, investments are needed to expand power grids and energy storage systems. Politically, some governments (like Germany and the Czech Republic) have achieved leniency with EU climate measures, while Brussels has concurrently secured a deal with Washington for additional purchases of American energy resources. This has sparked debates about the balance between environmental goals and energy security.
The trend of clean energy development is also strengthening globally. China and India introduced record amounts of solar and wind power generation in 2025, resulting in a slight decrease in their carbon emissions from electricity generation for the first time in over 50 years, despite overall consumption growth. In 2026, a further influx of investments in green projects worldwide is anticipated. However, the current crisis has reaffirmed that oil, gas, and coal remain indispensable for meeting peak demand and emergency situations. In the coming years, countries will need to harmonize the rapid development of renewables with maintaining adequate reserve capacities based on traditional fuels.
Venezuela: A Return to the Oil Market
An important development is the easing of sanctions against Venezuela. In January, following a change in leadership in Caracas, Washington announced plans to lift some of the 2019 restrictions to increase oil supply in the global market. A general license is expected to be issued, allowing foreign companies to expand operations in Venezuela’s oil and gas sector. Recipients of this license will include partners of the state-owned PDVSA—Chevron, Repsol, Eni, Reliance, and others—who have already submitted applications to ramp up production and exports.
Experts predict that Venezuela's oil exports will begin to rise quickly. By the end of 2025, sanctions had reduced shipments to 500,000 barrels per day (down from 950,000 barrels per day in November), but in 2026, they could exceed 1 million barrels per day. The U.S. has already finalized the first deal with Caracas for $2 billion to replenish its strategic reserve and is discussing an investment plan of approximately $100 billion to restore Venezuela's oil industry—from fields to refineries and power grids. The first tankers carrying Venezuelan oil have already arrived at U.S. ports under special permits, partially relieving PDVSA’s storage. Refineries on the U.S. Gulf Coast, designed for heavy Venezuelan oil, are preparing to resume processing this crude. Additional volumes from Venezuela may adjust the balance in the OPEC+ market, although recovery of production is expected to take time due to aging infrastructure.
Market Expectations and Conclusions
Despite all the upheavals, the global energy market is entering February 2026 without panic, although in a state of heightened alert. Short-term risks (weather and politics) maintain price volatility in oil and gas, but the systemic balance of supply and demand has not yet been disrupted. OPEC+ is keeping the oil market from facing shortages, and the rapid restoration of production and international supplies is smoothing out local disruptions. Assuming no further emergencies arise, oil prices are likely to remain near current levels (~$60–65 per barrel of Brent) until the next OPEC+ summit.
In the gas market, much will depend on the weather: a mild end to winter will help further reduce prices, while a new cold front could lead to a resurgence. Europe must replenish its depleted gas reserves before next winter, and competition with Asia for LNG will continue to be a significant factor in high price levels. Investors are also closely monitoring politics: any changes in relations with Iran and Venezuela or a turn in the war in Ukraine could substantially alter market sentiment.
In the long term, the energy transition remains pressing; however, recent events have underscored the critical importance of reliable traditional capacities. Companies and governments will need to seek a balance between investing in renewables and ensuring reserves based on fossil fuels. In 2026, the key objective will be to achieve this balance: maintaining energy security while simultaneously advancing toward climate goals.
