Energy and Oil and Gas News for Thursday, January 29, 2026: Global Oil and Gas Market, Electricity, Renewable Energy, Coal, Refineries, and Key Energy Sector Trends for Investors and Market 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 US temporarily disrupted up to 15% of oil production and significantly reduced natural gas output.
- Oil prices (Brent ~ $65/barrel) remain stable; OPEC+ signals its commitment to maintaining current production limits.
- The escalation of the US-Iran conflict increases supply disruption risks, despite ongoing peace negotiations regarding Ukraine.
- Natural gas prices in North America and Europe have soared amid frosty conditions; gas stocks in the EU have dropped to multi-year lows.
- Renewable energy sources have reached a record share in European electricity generation, but weak networks and harsh winter conditions have revealed the need for backup capacity.
- The US is easing sanctions against Venezuela following a change in leadership, opening the door for increased heavy oil exports to the global market.
Oil: Storm in the US and Price Stability
In the US, a powerful winter storm has led to a temporary shutdown of up to 2 million barrels per day (approximately 15% of the national figure). The Permian Basin was hit hardest, but production began to recover within a few days. In this context, oil prices stabilized after a spike earlier in the week: Brent hovers around $65 per barrel, and WTI around $60. Despite temporary disruptions, both benchmarks maintained a growth of about 2-3% for the week.
Extreme cold has also impacted oil refining. Several large US refineries have reduced operations due to equipment freezing, leading to a spike in fuel prices—particularly for diesel and heating oil. Nevertheless, a serious fuel shortage has been avoided due to existing stocks and the rapid resumption of operations as temperatures rise.
Meanwhile, global oil supply is returning to previous levels. In Kazakhstan, after repairs to the export pipeline, production at the largest field is resuming, boosting caspian oil supplies. OPEC+ countries are signaling their commitment to current quotas ahead of their next meeting, indicating no plans to increase production in March. Thus, despite natural disruptions, the global oil market remains relatively balanced.
Geopolitical Risks: Iran, Sanctions, and Negotiations
Geopolitical tensions continue to support uncertainty in energy markets. The conflict between the US and Iran has escalated, with President Donald Trump announcing the deployment of a "fleet" to the shores of Iran and threatening actions for suppressing protests and Tehran's nuclear ambitions. In response, Iran promised to view any attack as a "total war". Such statements add a risk premium to oil prices, as traders fear supply disruptions from the Middle East.
Simultaneously, cautious optimism surrounds ongoing negotiations between Russia, Ukraine, and the US. Successful dialogue could lead to a gradual easing of Western sanctions against the Russian oil and gas sector, changing the configuration of global energy flows. For now, the sanctions regime remains strict: Russian oil and gas exports are constrained by price caps and redirected primarily to Asia. Investors continue to assess geopolitical risks, focusing on both Middle Eastern events and potential shifts in sanctions policies.
Natural Gas: Frost and Price Surge
The natural gas market has been hit hard by extreme cold. In the US, widespread "freeze-offs" occurred due to the winter storm: up to 16% of gas production was temporarily halted—more than in the 2021 crisis. Daily gas production fell from approximately 110 to 97 billion cubic feet (from 3.1 to 2.7 billion cubic meters), triggering a sharp price surge. Henry Hub futures skyrocketed more than double, exceeding $6 per million British thermal units (MMBtu), approximately $210 per thousand cubic meters. As the cold conditions eased, prices retreated, but the situation remains extremely volatile and weather-dependent.
Europe is also facing a gas deficit. By mid-winter, European storage capacities dropped to below 50% (the lowest in recent years), as prolonged cold weather sharply increased gas withdrawal. Spot prices in the EU surged to ~$14 per MMBtu (around $500 per thousand cubic meters), a peak in recent months. A significant factor was supply: US LNG exports temporarily fell by almost half due to terminal issues, limiting gas inflow to Europe and driving prices up. Some LNG shipments were redirected to the US domestic market for higher returns, exacerbating the situation in the global market.
In the coming weeks, gas prices in Europe will depend on weather developments. If February proves to be relatively mild, the market will receive some relief, although gas stocks are still expected to be much lower than normal by the end of winter. EU governments and companies will need to actively replenish storage in the inter-season, competing for LNG in the global market. Analysts warn that a new wave of cold or delays in deliveries could trigger a price spike again, as the global gas market has become more interconnected and sensitive to local shocks.
Electricity and Coal: Strain on Networks
Energy systems in the Northern Hemisphere are experiencing increased strain. In the US, the operator of the largest eastern power grid (PJM) declared a state of emergency: daily peak consumption exceeded 140 GW, threatening rolling blackouts. To maintain balance, authorities had to deploy backup diesel generators and oil-fired power plants 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 facilities sharply declined, necessitating maximum utilization of traditional (hydrocarbon) generation capacities to meet demand.
A similar picture is evident in Europe: electricity demand surged, prompting several countries to temporarily restart coal-fired power plants to manage peaks. Although coal's share in EU electricity generation fell to a record 9.2% for 2025, its use rose locally during the current winter. Simultaneously, infrastructure limitations were exposed: networks' insufficient capacity forces the limitation of wind farm output during peak production, resulting in lost cheap energy and price increases during other times. Experts urge the acceleration of electricity grid upgrades and the adoption of storage systems to enhance energy systems' resilience and reduce dependency on coal in emergencies.
Renewable Energy Growth and the Energy Transition
The transition to clean energy continues to accelerate. In 2025, EU countries for the first time obtained more electricity from wind and solar (30% of generation) than from all fossil sources (29%). Overall, low-carbon sources (renewables and nuclear generation) accounted for 71% of electricity generation in the EU. Record generation was supported by the commissioning of new capacities: the total installed capacity of solar parks increased by 19% over the year. In some countries (Spain, the Netherlands, Hungary, etc.), solar energy already covers more than a fifth of national consumption.
Despite these successes, Europe faces the challenge of high energy costs and grid limitations. Price increases in 2025 coincided with periods of peak usage of gas plants and forced shutdowns of some wind farms due to overloading of networks. To reduce prices and ensure stable integration of renewables, investments in grid expansion and energy storage systems are essential. At the political level, some governments (such as Germany and the Czech Republic) have achieved easing of EU climate measures, while Brussels has simultaneously struck deals with Washington for additional volumes of US energy resources. This has sparked discussions about balancing environmental goals with energy security.
The trend of clean energy development is also strengthening on a global scale. China and India introduced record volumes of solar and wind power plants in 2025, resulting in a slight reduction in carbon emissions from their power sectors for the first time in over 50 years, despite an increase in overall consumption. In 2026, further investments in green projects worldwide are expected. Nevertheless, the current crisis has confirmed that oil, gas, and coal remain indispensable for covering peak demand and emergency situations. In the coming years, countries face the task of combining accelerated renewable development with maintaining adequate backup capacity based on traditional fuels.
Venezuela: Return to the Oil Market
A significant development has been the easing of sanctions against Venezuela. In January, following a change in leadership in Caracas, Washington announced plans to lift some restrictions imposed in 2019 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 for increasing production and exports.
Experts predict that Venezuela's oil exports will begin to rise rapidly. By the end of 2025, exports had fallen to 500,000 barrels per day (down from 950,000 barrels per day in November) due to sanctions but may exceed 1 million barrels per day in 2026. The US has already agreed with Caracas on its first $2 billion deal to replenish its strategic reserve and is also discussing a roughly $100 billion investment plan to restore Venezuela's oil sector—from fields to refineries and power grids. The first tankers of Venezuelan oil have already arrived at US ports under special permits, allowing for partial relief of PDVSA's storage capacities. Gulf Coast refineries designed for heavy Venezuelan oil are preparing to resume processing this crude. Additional volumes from Venezuela could 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 disruptions, the global energy market enters February 2026 without panic, although in a state of heightened readiness. Short-term risks (weather and politics) are maintaining volatility in oil and gas prices, but the systemic balance of supply and demand is currently intact. OPEC+ is keeping the oil market from falling into deficit, and a rapid recovery in production and international supply is smoothing out local disruptions. Unless new extraordinary events occur, oil prices are likely to stay near current levels (~$60–65 for Brent) until the next OPEC+ summit.
In the gas market, much will depend on the weather: a mild end to winter will assist in further price reductions, while a new cold front might again cause a spike. Europe needs to replenish its depleted gas stocks ahead of next winter, and competition with Asia for LNG will remain a factor in high price levels. Investors are also keeping an eye on political developments: any changes regarding Iran and Venezuela, or a breakthrough in the Ukraine war, could significantly shift market sentiment.
In the long term, the energy transition remains relevant, but recent events have confirmed 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, a key goal will be to achieve this balance: maintaining energy security while simultaneously advancing towards climate targets.
