Energy News - Monday, January 19, 2026: New Round of Sanction Pressure, Oil Surplus, and Record LNG Imports. Oil, Gas, Electricity, Renewables, Coal, Oil Products, Refineries — Key Trends in the Global Energy Sector for Investors and Market Participants.
The beginning of 2026 is marked by a continuation of geopolitical confrontation and a large-scale reshaping of global energy resource flows, drawing the attention of investors and market participants. Western countries are maintaining sanction pressure on Russia: the European Union is preparing a new package of energy-related sanctions, striving to completely eliminate dependence on Russian oil and gas. At the same time, the global oil market is characterized by a surplus of supply — slow demand growth and the return of some producers (for example, Iran and Venezuela's gradual recovery of output) keep Brent prices around $60 per barrel. The European gas market withstands the winter consumption peak thanks to record LNG imports and diversified supplies (including new volumes of gas from Azerbaijan), which helps contain price increases even as Russian pipeline exports decrease. The global energy transition is gaining momentum: in 2025, record renewable energy capacities were commissioned, although the reliable operation of energy systems still requires a reliance on traditional resources. In Asia, demand for coal and hydrocarbons remains high, supporting the global commodity market, while in Russia, following last year's gasoline price spike, authorities are extending emergency restrictions on oil product exports 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 being held at a moderate level due to the persisting supply surplus. The benchmark Brent is trading around $60–65 per barrel, while American WTI is in the $55–60 range. These price levels are approximately 10–15% lower than a year ago, reflecting a gradual correction after the peaks of the 2022–2023 energy crisis. The market is witnessing an excess of oil of about 2–2.5 million barrels per day, as OPEC+ countries increased output in the second half of 2025 in an effort to reclaim lost market shares. Additionally, the United States has ramped up its supply (U.S. shale oil production remains high), and some volumes have partially returned from previously sanctioned countries — Iran and Venezuela are witnessing a rise in export capacity following the easing of a number of restrictions. However, global demand growth remains restrained: China's economic slowdown and energy-saving effects after the period of high prices limit the increase in oil consumption. Analysts estimate that without a significant demand revival or new actions from producers, prices could fall to $55 per barrel in the first half of 2026. The key factor is OPEC+'s policy: if the alliance does not reduce production and continues its prior course, prices will remain under pressure. Leading exporters are unlikely to allow a market collapse and may again restrict supply to support prices if necessary. Geopolitical risks also exist, but so far they have not led to supply disruptions: the recent easing of tensions in the Middle East quickly removed the “premium” from prices, and oil quotes soon returned to previous values. Thus, the oil market is approaching a balance, albeit one shifted in favor of buyers — excessive supply and moderate demand prevent prices from rising significantly.
Gas Market: Winter, LNG, and New Routes Replace Russian Deliveries
The European gas market entered 2026 under radically new conditions — virtually without pipeline gas from Russia. Since January 1, the EU has enforced a ban on most such supplies, and Europe has prepared for this step in advance. EU countries filled underground gas storage facilities (UGS) to over 90% by the start of winter; by mid-January, the reserves decreased to approximately 55–60% of capacity, still above the average levels of previous years. Despite harsh cold, gas withdrawals from UGS are proceeding according to plan, without panic, and exchange prices remain several times lower than the peaks of 2022.
The primary reason for this stability is record LNG imports. European LNG terminals in January are operating at maximum capacity: daily regasification volumes exceed 480 million cubic meters, surpassing previous historical records. This influx of LNG compensates for the cessation of Russian transit and restrains gas price increases. Although spot prices in Europe have increased by 30–40% since the beginning of the month due to the cold, they are still far from the extreme values of the energy deficit in 2022. To meet demand amidst limited supplies from Russia, Europeans are relying on several directions:
- Maximal increase in pipeline gas supplies from Norway and North Africa;
- Boosting LNG imports from the USA, Qatar, and other countries;
- Expansion of the Southern Gas Corridor's usage (supplies from Azerbaijan to EU countries);
- Reducing internal consumption through energy-saving measures and increasing energy efficiency.
The combination of these measures allows Europe to relatively confidently navigate the current heating season even without Russian gas. Moreover, Russia is redirecting its exports to the East: Gazprom reported record daily gas deliveries to China via the Power of Siberia pipeline in January. Regarding the global market, seasonal demand is also felt in Asia: key importers in Northeast Asia are ramping up LNG purchases, and the Asian JKM index has risen to ~$10 per MMBtu (a maximum in the last one and a half months). Nevertheless, the global gas balance remains stable: flexible redistribution of flows between regions and increased production (including in the USA, where Henry Hub prices hold around $3 per MMBtu) enable covering the increased demand. In the coming weeks, the situation in the gas market will mainly 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 Flow Redistribution
The sanction confrontation between Moscow and the West in 2026 continues to evolve. At the end of 2025, the EU approved the 19th package of measures, a significant portion of which targeted the Russian energy sector — including a decision to lower the price cap on Russian oil starting in February 2026 and accelerate the abandonment of LNG imports from Russia (with a ban on purchases from 2027). At the beginning of 2026, Brussels announced the preparation of the next step: it plans to legally prohibit any remaining volumes of Russian oil imports into EU countries, as well as implement a reached agreement to completely cease purchases of Russian pipeline gas. In parallel, the United States and the European Union are tightening control over compliance with existing restrictions: last autumn, the U.S. Treasury introduced additional sanctions against oil companies Rosneft and Lukoil, while European authorities are intensifying oversight over the tanker fleet transporting Russian oil in circumvention of set rules. Russia, for its part, extended its embargo on oil sales to countries participating in the price cap until June 30, 2026.
Meanwhile, the export of Russian oil and oil products remains at a relatively high level thanks to redirection to Asia. China, India, Turkey, and several other countries continue to purchase Russian hydrocarbons at a significant discount to world prices. As a result, the global energy market is effectively divided into two parallel segments: the "Western" one, where sanctions and restrictions apply, and an alternative one where Russian raw materials find a market, albeit at reduced prices. Investors and traders are closely monitoring the sanction policy, as any changes impact logistics and price dynamics in the markets.
At the same time, elements of flexibility have appeared in the West's sanction strategy towards certain countries. Following political changes in Caracas, the United States signaled its readiness to accelerate the lifting of oil sanctions against Venezuela. International companies have already received expanded licenses to operate in Venezuela: in the coming months, Chevron and other operators will be able to significantly increase Venezuelan oil exports. Furthermore, Venezuela has signed its first-ever contract for natural gas exports, which opens 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 severely curtailed its production capacity. Nevertheless, the mere fact of returning additional volumes to the market from Venezuela strengthens consumer confidence and exerts downward pressure on price increase expectations. There is also a noticeable reduction in geopolitical tensions in the Middle East: by mid-January, unrest in Iran had subsided, and Washington's tough rhetoric regarding possible strikes against Iran softened. As a result, the risks of sudden supply disruptions from Middle Eastern oil have temporarily decreased. Thus, the beginning of 2026 is characterized by a contradictory influence of politics on energy markets: on one hand, sanction pressure on Russia remains high, while on the other, localized de-escalation in certain regions and targeted easing of restrictions (such as with Venezuela) create a more favorable environment than previously expected.
Asia: India and China Navigate Between Import and Production Development
- India: Despite pressure from Western partners to reduce cooperation with sanctioned suppliers, New Delhi has only moderately decreased purchases of Russian oil and gas in recent months. A complete abandonment of these resources is deemed impossible given their crucial role in national energy security. The country continues to receive raw materials from Russian companies at favorable terms: the discount on Urals oil for Indian buyers is approximately $4–5 to Brent price, making supplies very attractive. As a result, India remains one of the largest importers of Russian oil while simultaneously ramping up purchases of oil products (for example, diesel) to satisfy growing domestic demand. Concurrently, the Indian government is intensifying efforts to reduce future import dependence. Prime Minister Narendra Modi has announced a large-scale program to develop deep-water oil and gas fields on the continental shelf. The state company 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 discover new significant hydrocarbon reserves and move India towards energy self-sufficiency in the long run.
- China: The largest economy in Asia continues to increase its energy consumption, combining increased imports with growing domestic production. Beijing has not joined Western sanctions against Moscow and has seized the opportunity to ramp up purchases of Russian energy sources at favorable terms. Analysts estimate that in 2025, China's oil and gas imports grew by 2–5% compared to the previous year, exceeding 210 million tons of oil and 250 billion cubic meters of gas, respectively. The growth rates have somewhat slowed relative to the spike in 2024 but remain positive. At the same time, China is setting records for domestic production: in 2025, national companies produced over 200 million tons of oil and about 220 billion cubic meters of natural gas, an increase of 1–6% from the previous year's levels. The state is actively investing in developing hard-to-reach fields, implementing new technologies, and improving oil recovery from mature reservoirs. However, given the scale of the Chinese economy, dependence on imports remains substantial: about 70% of consumed oil and approximately 40% of gas are still procured from abroad. In the coming years, these proportions are unlikely to change significantly. Therefore, the two largest Asian consumers — India and China — continue to play a crucial role in the global commodity markets, navigating between the necessity to import vast amounts of fuel and 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. Many countries commissioned record capacities of solar and wind generation, leading to historical peaks in renewable energy output. In the European Union, total generation from solar and wind power plants for the year exceeded electricity generation from coal and gas-fired power plants for the first time, solidifying the shift in the balance towards “green” energy. In countries such as Germany, Spain, the UK, and others, the share of renewables in electricity consumption regularly surpassed 50% on certain days due to the commissioning of new capacities. In the U.S., renewable energy also reached record levels: at the beginning of 2025, over 30% of total generation came from renewables, and the total electricity generated from wind and solar for the year exceeded production from coal-fired power plants. China remains the global leader in the scale of “green” construction — in 2025, the country introduced tens of gigawatts of new solar panels and wind installations, constantly updating its own records for clean energy production. Major oil and gas and electric power corporations are continuing to diversify their business in light of these trends: significant investments are being directed towards renewable energy projects, hydrogen technology development, and energy storage systems.
However, impressive progress in clean energy necessitates maintaining a balance with traditional generation. The past year showed that during peak demand periods or adverse weather conditions (for example, during periods of low wind and weak solar generation in winter), reserve fossil fuel-based capacities remain critically important for ensuring reliable energy supply. In Europe, which has significantly reduced coal's share in recent years, some coal stations were reluctantly brought back online during periods of extreme cold, while gas-fired power plants took on increased loads due to a lack of wind generation. In Asian countries, maintaining a base level of coal generation protects the energy system from outages during spikes in demand. As a result, the world, while rapidly moving towards cleaner energy, is still far from achieving complete carbon neutrality. The transition period is characterized by the coexistence of two models — rapidly growing renewable and traditional thermal, which backstop and smooth seasonal and weather fluctuations. The strategy of many states is to develop renewables in parallel with modernizing classical infrastructure, which should ensure the resilience of energy systems on the path to a low-carbon future.
Coal: Asian Demand Keeps the Market at a High Level
Despite efforts at decarbonization, the global coal market is still characterized by significant consumption volumes and relatively stable prices. Demand for coal remains high, especially in Asian countries. In China and India — the two largest consumers — this resource continues to play a key role in electricity generation and metallurgy. According to industry reports, global coal consumption in 2025 remained near historical highs, dropping only 1–2% compared to the record levels of 2024. The increase in coal use in developing economies compensates for its declining share in the energy balance of Europe and North America. Many Asian states continue to commission new high-efficiency coal-fired power plants to meet the growing electricity demand of their populations and industries.
The price situation in the coal market is calmer now than during the peak of the energy crisis: at the beginning of 2026, thermal coal prices are in the range of about $100–110 per ton, significantly lower than the peaks of two years ago. Price easing is aided by increased supply — leading exporters (Indonesia, Australia, South Africa, Russia, etc.) have ramped up production and exports, while consumption in Europe declines as it develops renewable energy and returns to work with nuclear generation. Europe continues its systematic move away from coal: a significant event was the closure in January of the last deep coal mine in the Czech Republic, marking the end of a 250-year history of coal mining in the country. Nonetheless, on a global scale, coal remains an important component of the energy balance. The International Energy Agency predicts that global coal demand will plateau in the coming years, followed by a gradual decline. In the long term, stricter environmental policies and competition from cheap renewable sources will limit the coal sector's development, but in the short term, the coal market will continue to rely on consistently high Asian demand.
Russian Market: Export Restrictions and Fuel Price Stabilization
Unprecedented measures continue to be implemented in Russia's domestic fuel and energy complex to normalize the pricing situation. After wholesale prices for gasoline and diesel fuel soared to record levels in August 2025, the Russian government introduced a temporary ban on the export of key oil product types. These restrictions have been extended multiple times and are now in force at least until February 28, 2026, covering the export of gasoline, diesel fuel, fuel oil, and gas oils. The halt in exports has allowed for significant volumes of fuel to be redirected to the domestic market, which noticeably reduced exchange prices by winter. Wholesale prices for oil products have retreated by dozens of percent from peak levels, and the rise in retail prices at gas stations slowed down — by the end of the year, it reached about 5%, fitting within the overall inflation framework. Thus, the fuel crisis has largely been mitigated: there is no gasoline shortage at refueling stations, panic demand has subsided, and prices for end consumers have stabilized.
However, the cost of these measures has been a reduction in export revenues for oil companies and the budget. Russian oil producers are forced to forgo profits to saturate the domestic market. Authorities claim that the situation is under control: the production cost of oil in most Russian fields is low, so even with Urals prices below $40 per barrel, major projects remain profitable. Nevertheless, the decline in export revenues — the oil and gas revenues in the Russian budget fell by approximately a quarter in 2025 compared to the previous year — creates risks for launching new investment projects, which require higher global prices and access to external markets. The government does not provide direct compensation to companies but continues the damping mechanism (reverse excise tax), which partially reimburses lost revenues from domestic fuel sales.
The Russian 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 keeping internal energy prices in check and preserving export revenues, which are vital for replenishing the budget and financing sectoral development. The government emphasizes that it is prepared to extend restrictions on oil product exports or introduce new measures if necessary to prevent shortages and price shocks for the population. At the same time, measures are being developed to stimulate processing and find new markets for raw materials. Thus far, the actions taken allow for stable fuel supplies within the country and keeping prices at an acceptable level for consumers. Monitoring the situation in the fuel sector remains one of the priorities of state policy, as it influences socio-economic stability and the resilience of Russia's oil and gas complex under external pressure.
