Oil and Gas and Energy News — Saturday, January 17, 2026: Sanctions Tightening, Oil Surplus, and Diversification of Gas Supplies. Oil, Gas, Electricity, Renewables, Coal, Refining — Key Trends in the Fuel and Energy Sector for Investors and Market Players.
At the beginning of 2026, the fuel and energy complex faces continued geopolitical confrontation and a significant restructuring of global energy resource flows. Western countries are intensifying sanctions pressure on Russia — the European Union is imposing new restrictions on energy trade. Simultaneously, the global oil market is experiencing a surplus in supply: slowing demand and the return of certain producers (such as Venezuela) are keeping the Brent price around $60 per barrel. The European gas market is undergoing historic changes: since January, gas imports from Russia have effectively ceased, yet high reserves in EU underground storage facilities and the 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 introduction of renewable energy capacities, although traditional resources remain necessary for the reliable operation of energy systems, while demand for coal and hydrocarbons in Asia remains elevated, supporting the global commodity market. In Russia, following last year's spike in gasoline prices, authorities extended emergency export restrictions on petroleum products in an effort 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, and the American WTI is in the range of $55–60. The market is witnessing a supply surplus of approximately 2.5 million barrels per day. This is due to OPEC+ countries having increased production in the second half of 2025, aiming to regain lost market shares. Additionally, U.S. oil production remains at a high level, and the partial return of Venezuelan volumes to the market after sanctions were eased has bolstered supply.
Demand for oil is growing at a more measured pace. The slowing Chinese economy and the effect of energy savings following a period of high prices in previous years are limiting global consumption growth. Against this backdrop, analysts forecast that oil prices could drop to $55 per barrel in 2026, at least in the first half of the year, unless producers intervene. The key factor is OPEC+ policy: if the alliance continues to expand supply or delays new production cuts, prices will remain under pressure. Leading exporters are unlikely to allow a market crash and can once again cut production if necessary to support prices. Geopolitical risks are present but have not yet led to supply disruptions.
Gas Market: Europe Seeks Alternatives to Russian Gas
The European gas market enters 2026 with a new reality: the virtual halt of pipeline gas imports from Russia. According to the EU decision, as of January 1, a ban on these supplies takes effect, depriving Europe of approximately 17% of its previous imports. EU member states have preemptively filled gas underground storage facilities to over 90%. Despite winter conditions, gas withdrawals from storage are being managed without sharp price spikes. Exchange prices for gas in Europe remain significantly lower than the peaks of 2022, reflecting a relative balance in the market.
To compensate for the falling volumes of Russian gas, the EU is focusing on several directions:
- Maximizing pipeline supplies from Norway and North Africa;
- Increasing LNG imports from the United States, Qatar, and other countries;
- Enhancing the use of the Southern Gas Corridor from Azerbaijan;
- Reducing demand through energy conservation.
The combination of these measures allows Europe to relatively calmly navigate the current heating season, despite the cessation of supplies from Russia. At the same time, Russia is redirecting its gas exports to the East: "Gazprom" has announced a new record for daily deliveries to China via the "Power of Siberia" pipeline in early January.
International Politics: Sanctions and Energy
The sanctions standoff between Moscow and the West continues to escalate. At the end of 2025, the EU approved the 19th package of measures, a significant part of which targets the energy sector. Among these are a reduction of the price cap on Russian oil from February 2026 and a complete ban on the import of Russian LNG by 2027. In response, Moscow has extended its embargo on oil sales to price-cap participants until June 30, 2026.
Russian exports of oil and petroleum products are currently held at a relatively high level due to the redirection of flows to Asia, where China, India, Turkey, and other countries are purchasing raw materials at substantial discounts. As a result, the global energy market has effectively split into two parallel contours — 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 price dynamics in commodity markets.
Energy Transition: Records and Balance
The global shift to 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, around 85–90 GW of new renewable energy sources were added in one year, the share of renewable electricity in the U.S. exceeded 30%, and China installed tens of gigawatts of "green" power plants, renewing its own records.
The rapid growth of renewable energy has raised questions about the reliability of energy systems. During periods of calm or absence of sun, backup capacities from traditional power plants are still necessary to cover demand peaks and prevent outages. Therefore, large-scale energy storage projects are actively being developed worldwide — significant battery farms are being constructed and research is underway into storage technologies in the form of hydrogen and other energy carriers.
BP's experience, which decided to cut investments in renewables and write down several billion dollars in "green" assets, has shown that even oil and gas giants must balance environmental goals with profit. Despite the vigorous growth of the renewable sector, the bulk of profits still comes from traditional oil and gas businesses. Investors demand a cautious approach: "green" projects must be developed without compromising financial stability. The energy transition continues, but the lesson of 2025 is the necessity for a more balanced strategy that combines accelerated deployment of renewables with maintaining the reliability of energy systems and ensuring investment profitability.
Coal: High Demand in Asia
The global coal market remained on an upward trajectory in 2025, despite global goals for reducing coal usage. The main reason is the consistently high demand in Asia. Countries such as China and India continue to burn vast amounts of coal for electricity generation and industrial needs, offsetting declines in consumption in Western economies.
China accounts for nearly half of the world’s coal consumption and, even with production exceeding 4 billion tons annually, is forced to increase imports during peak periods. India is also ramping up production; however, due to rapid economic growth, it has to import significant volumes of fuel, mainly from Indonesia, Australia, and Russia.
High Asian demand supports coal prices at relatively elevated levels. Major exporters — from Indonesia and Australia to South Africa — have increased revenues due to stable orders from China, India, and other countries. In Europe, following a temporary spike in coal usage in 2022–2023, its share is once again decreasing due to the development of renewable energy sources and the resumption of nuclear generation. Overall, despite climate agendas, coal will maintain a significant portion of the global energy balance in the coming years, although investments in new coal projects are gradually declining.
Russian Market: Restrictions and Stabilization
The Russian government has been manually restraining fuel price growth since the fall of 2025. Following a record rise in wholesale gasoline and diesel prices in August, a temporary ban on the export of key petroleum products was implemented, extended until February 28, 2026. The restrictions apply to the export of gasoline, diesel fuel, fuel oil, and gas oils, and have already had an effect: wholesale prices dropped by several dozen percent from peak levels by winter. Retail price growth has slowed, and by the end of the year, the situation stabilized — gas stations are supplied with fuel, and panic buying has subsided.
For oil companies and refineries, these measures mean lost profits, but authorities have to demand that businesses "tighten their belts" for the sake of market stability. The production cost of oil in most Russian fields is low, so even a price of Russian oil below $40 is not critical for profitability. However, the reduction in export revenues jeopardizes the launch of new projects that require higher global prices and access to external sales markets.
The government refrains from direct subsidies to the industry, stating that the situation is under control and energy companies are still profitable even with reduced exports. The domestic fuel and energy sector is adapting to new conditions. The main task for 2026 is to maintain a balance between restraining domestic energy prices and supporting export revenues, which are important for the budget and the development of the sector.
