News from the Oil, Gas and Energy Sector – Saturday, January 3, 2026: Sanctions Stalemate Continues; Oil Surplus Pressuring the Market; Stability in Gas Supplies; Records in Green Energy
Current events in the fuel and energy complex (FEC) as of January 3, 2026, are attracting investor attention due to a combination of market stability and geopolitical tensions. Following a challenging previous year, the global oil market is entering the new year with signs of oversupply: Brent crude prices are hovering around $60 per barrel (almost 20% below last year's levels), indicating cautious sentiment and OPEC+ efforts to maintain balance. The European gas market is demonstrating relative resilience at the midpoint of winter – underground gas storage in the EU is still over 50% full, providing a buffer amid moderate demand growth during the cold. Against this backdrop, gas exchange prices remain comparatively low, easing the energy cost burden for industries and consumers in Europe.
Meanwhile, the global energy transition is gaining momentum: many countries are reporting new records in renewable energy generation, and investment in clean energy is continuing to rise. However, geopolitical factors are still contributing to uncertainty – the sanctions standoff surrounding Russian energy exports persists, forcing major consumers such as India to reconsider supply routes. In Russia, authorities are prolonging emergency measures to regulate the domestic fuel market, aiming to prevent new price spikes. Below is a detailed overview of key news and trends in the oil, gas, electricity, and raw materials sectors as of this date.
Oil Market: Oversupply and Cautious Price Corridor
Global oil prices maintain a relatively stable but lower level at the beginning of the year. The North Sea Brent is trading around $60 per barrel, and American WTI is close to $57–58. These levels are significantly below last year's figures, reflecting a gradual market weakening after the price spikes of previous years. In 2025, OPEC+ countries partially lifted production restrictions, which, along with increased oil output from the USA, Brazil, and Canada, led to an uptick in global supply. For 2026, a surplus of oil is projected – according to the International Energy Agency, production could exceed demand by nearly 4 million barrels per day. OPEC+ participants themselves remain cautious: the alliance has agreed to maintain production at current quotas in the first quarter, pausing any further increases. This approach aims to prevent a price collapse, but opportunities for price growth are limited – extensive land oil stocks and record volumes on tankers en route indicate market saturation.
A significant role in price formation is played by China, the largest oil importer. Last year, Beijing actively engaged in strategic purchases, acquiring excess raw materials when prices dropped and reducing imports when prices increased. Thanks to this flexible approach, prices in the second half of 2025 remained within a narrow corridor of around $60–65 per barrel. At the end of the year, Chinese companies once again ramped up purchases of cheap oil, replenishing stocks. As a result, although the market is formally facing an oil surplus, a significant portion is still being absorbed by China, thus establishing a "floor" for prices. However, the potential for further accumulation is not limitless – China’s storage facilities are already filled to the brim with hundreds of millions of barrels, and in 2026, Beijing's strategy will be one of the decisive factors for oil prices. Investors will closely watch whether China continues to purchase excess oil to support demand or slows down imports, which could increase price pressure.
Gas Market: Solid Supply Ahead of Continued Winter
The gas market is characterized by relatively favorable trends for consumers. European countries entered winter with high reserves: by the beginning of January, underground gas storage in the EU was approximately 60–65% full, slightly below last year’s record levels but significantly above historical averages. A mild start to the winter season and energy-saving measures have allowed for reduced gas withdrawals from storage, maintaining a solid reserve for the remaining cold months. Furthermore, stable liquefied natural gas (LNG) supplies continue to compensate for the near-total cessation of pipeline deliveries from Russia. In 2025, Europe increased LNG imports by a quarter, mainly due to the ramp-up of exports from the USA and Qatar, launching new reception terminals. Additional LNG volumes and moderate demand are keeping gas prices in Europe at a restrained range – around $9–10 per million BTU (approximately €28–30 per MWh for the Dutch TTF hub), which is significantly lower than the peak values seen during the 2022 crisis.
This year, experts expect to see relative stability in the European gas market, provided that extreme cold spells or unforeseen circumstances do not occur. Even with potential cold snaps, Europe is far better prepared than two years ago: reserves are substantial, and LNG suppliers have available capacity for rapid increases in shipments. However, demand remains a risk factor in Asia – with accelerating economic growth in China or other Asia-Pacific nations, competition for LNG cargoes may intensify. For now, the balance in the gas market looks solid, with prices maintaining a moderate level. This scenario is beneficial for European industries and energy sectors, reducing costs and fostering optimism for the remainder of the winter period.
International Politics: Sanction Pressure and Trade Restrictions Remain Firm
Geopolitical factors continue to exert a significant influence on energy markets. Dialogue between Russia and the USA, cautiously resumed last summer, has yet to yield notable results by early 2026. No direct agreements have been reached in the oil and gas sectors, and the sanctions regime remains in full force. Moreover, signals from Washington increasingly suggest the possibility of tightening restrictions. The American administration links the lifting of some sanctions to progress in resolving political crises; in the absence of such progress, new measures may be implemented. For instance, a proposal for imposing 100% tariffs on exports to the USA of products from China is on the table if Beijing does not reduce its purchases of Russian oil. Such statements heighten market nervousness, even though they currently remain at the level of rhetoric.
A recent incident illustrates this point: at the end of December, the USA detained and confiscated a shipment of oil being transported by a Panama-flagged tanker, reportedly destined for China and of Iranian-Venezuelan origin. This case demonstrated Washington's determination to close off sanction evasion channels, even if it means resorting to forceful methods at sea. Concurrently, the European Union confirmed the extension of its sanction limitations against Russian energy exports and aims to maintain price caps on oil and oil products from Russia. Collectively, these factors indicate that the sanctions standoff is entering a new phase without signs of easing. The current situation forces importing countries to seek flexible solutions – diversifying sources, utilizing shadow tanker fleets, and transitioning to payments in national currencies – to secure fuel amid ongoing political pressure. Global markets, in turn, are embedding a risk premium into prices and are closely monitoring the further developments in the dialogue between powers.
Asia: India and China Balancing Between Import and Domestic Production
- India: Faced with tightening Western sanctions, Delhi must adopt a flexible approach to oil procurement. The sharp reduction in Russian energy imports at Washington's behest remains unacceptable to the country – Russian oil and gas remain critically important for meeting its economic needs, accounting for over 20% of India's crude oil imports. However, due to sanction pressure and logistical issues, Indian refineries slightly reduced purchases from Russia at the end of 2025. According to industry analysts, in December, Russian oil supplies to India fell to approximately 1.2 million barrels per day – the lowest level in three years (down from a record 1.8 million b/d a month earlier). To compensate for this decline and safeguard against shortages, the leading oil refining corporation Indian Oil activated an options agreement for a shipment of oil from Colombia and is also exploring additional supplies from Middle Eastern and African countries. Simultaneously, India continues to seek preferences: Russian suppliers are providing it with significant discounts (estimated around $4–5 off the Brent price for Urals), keeping Russian barrels attractive even under sanction pressure. In the long term, New Delhi is ramping up investments in exploration and production on its own territory. In particular, a large-scale program for developing deep-water oil and gas fields has been launched: the state-owned ONGC is drilling ultra-deep wells in the Andaman Sea, and the initial results are promising. These measures aim to enhance India's energy independence, although in the coming years, the country will remain heavily reliant on imports – over 85% of consumed oil is sourced from abroad.
- China: The largest economy in Asia continues to balance between increasing domestic production and ramping up imports of energy resources. Beijing has not joined Western sanctions against Moscow and has taken advantage of the situation to boost purchases of Russian oil and gas at favorable prices. By the end of 2025, China’s oil imports approached record levels again – about 11 million barrels per day, just shy of the 2023 levels. Imports of natural gas (both LNG and pipeline) also remain high, fueling industry and power generation amid economic recovery. Concurrently, China is annually increasing its domestic production: in 2025, domestic oil production reached a record ~215 million tonnes (approximately 4.3 million barrels per day, +1% year-on-year), and natural gas output surpassed 175 billion cubic meters (+5–6% year-on-year). The growth of internal resources helps cover part of the demand but does not eliminate the need for imports. Even with all these efforts, China still imports around 70% of its consumed oil and about 40% of its gas. The Chinese authorities are actively investing in the development of new fields, oil recovery enhancement technologies, and expansion of reservoir capacities for strategic stockpiling. In the future, Beijing plans to continue increasing its oil reserves, creating a "safety cushion" against market shocks. Thus, India and China – the two largest Asian consumers – continue to play a key role in global raw material markets, combining strategies for securing imports with the development of their resource base.
Energy Transition: Record Growth in Renewables and the Role of Traditional Generation
The global transition to clean energy reached new heights in 2025, and this trend is set to continue in 2026. In the European Union, total electricity generation from solar and wind power plants for the year has exceeded that of coal and gas-fired power plants for the first time. The share of "green" electricity in the EU's energy balance steadily grows due to the commissioning of multiple new capacities – after a temporary return to coal during the 2022-2023 crisis, European countries are actively decommissioning coal plants and focusing on renewables. In the USA, renewable energy also set historic records: over 30% of the country's total generation now comes from renewables, and in 2025, the total amount of electricity generated from wind and solar surpassed that of coal plants for the first time. China, being the world leader in renewable energy capacity, installed tens of gigawatts of new solar panels and wind generators last year, renewing its clean energy production records. Overall, companies and governments worldwide are directing unprecedented funds towards the development of low-carbon energy. According to the International Energy Agency, total investments in the global energy sector in 2025 exceeded $3 trillion, with more than half of this funding directed toward renewable energy projects, modernization of power grids, and energy storage systems.
This rapid growth in renewable energy is altering market structures but also presenting new challenges. The main challenge is ensuring the reliability of energy systems with the growing share of variable sources. In 2025, many countries faced the need to balance increased generation from solar and wind while still relying on traditional capacities. For instance, in Europe and the USA, gas-fired power plants still play an important role as flexible backup capacity during peak loads or declines in renewable output. In China and India, modern coal and gas plants continue to be constructed alongside the expansion of renewables to meet rapidly growing electricity demand. Consequently, the global energy transition is entering a phase where new records in "green" generation go hand in hand with the need to modernize infrastructure and energy storage. Despite the stated goals of many governments to achieve carbon neutrality by 2050–2060, in the short term, traditional energy sources remain an important part of the balance, ensuring the stability of energy systems during the transition period.
Coal: Stable Demand Supports the Market
Despite the accelerated development of renewable sources, the global coal market in 2025 retained significant volumes and remains a key part of the global energy balance. Demand for coal products remains consistently high, particularly in the Asia-Pacific region, where industrial growth and energy needs necessitate mass usage of this fuel. China – the world's largest consumer and producer of coal – again approached record levels of coal combustion last year. Annual output from Chinese mines exceeds 4 billion tonnes, covering a lion's share of domestic needs. However, this is barely enough to satisfy peak demand, especially during extremely hot summer months (when energy system loads rise due to air conditioning usage). India, with large coal reserves, is also increasing its usage: over 70% of electricity in the country is still generated from coal-fired power plants, and absolute coal consumption is rising along with the economy. Other developing Asian economies (Indonesia, Vietnam, etc.) have increased both production and export of energy coal in recent years, filling niches that arose in the market and helping to keep global prices relatively stable.
After the price shocks of 2022, prices for energy coal returned to more normalized levels. In 2025, coal prices fluctuated within a narrow range, reflecting a balance between high demand in Asia and increasing supply from leading exporters. Many countries have announced plans to reduce their use of coal in the future to meet climate goals; however, in the short term, this type of fuel remains largely irreplaceable. For billions of people worldwide, electricity from coal-fired plants currently provides basic stability in energy supply, especially where alternatives are lacking. Experts agree that for the next 5–10 years, coal generation – particularly in Asia – will continue to be a significant component of energy systems. Only with the further dropping of energy storage costs and development of backup capacities can we anticipate a notable reduction in the share of coal globally. For now, the coal market is supported by the inertia of high demand, ensuring its relative price stability even amid the "green" transitions of developed countries.
Russian Oil Products Market: Extension of Measures to Stabilize Prices
At the beginning of 2026, the implementation of measures aimed at holding prices and preventing shortages continues in the Russian fuel market. After a sharp spike in gasoline prices last summer, the situation has somewhat normalized; however, authorities are not relaxing control. The government has extended the existing ban on the export of automotive gasoline and diesel fuel until the end of February 2026 to maintain an additional supply of resources for domestic consumers during the winter months. As a reminder, a complete embargo on fuel exports was first imposed in the fall of 2025 amid a crisis on the stock market and has since been extended in several stages. Concurrently, as of January 1, excise taxes on gasoline and diesel fuel have increased by 5.1%, slightly raising the tax burden on the industry; however, the damping mechanism and direct subsidies for refiners are being maintained. These subsidies compensate companies for lost income and incentivize them to direct sufficient volumes of products to the domestic market, keeping wholesale prices in check.
- Export Control: the complete ban on the export of gasoline and diesel fuel from Russia has been extended until February 28, 2026. This measure is expected to increase fuel supply in the domestic market by at least 200–300 thousand tonnes per month, previously exported.
- Financial Support: the damping mechanism and subsidies for oil companies are maintained, allowing for partial compensation of the difference between domestic and external prices. As a result, refineries have an economic incentive to ensure priority delivery of fuel at gas stations within the country, and retail price growth remains moderate.
- Monitoring and Response: relevant agencies (Ministry of Energy, Federal Antimonopoly Service, etc.) are monitoring the situation with fuel production and supply on a daily basis. Control over the operations of refineries and gasoline distribution across regions has been strengthened. If necessary, authorities are ready to quickly deploy reserves or introduce new restrictions to avoid local shortages. This was recently confirmed by an incident at the Ilysky refinery in the Krasnodar region: following infrastructure damage from drone debris, emergency services quickly extinguished the fire, preventing market impact.
The combination of these measures has already yielded results: wholesale prices for fuel have retreated from peak values, gas stations nationwide are well-stocked with fuel, and retail price growth over the past year has been limited to only a few percent, which is close to inflation levels. Authorities intend to continue acting preventively, especially during the planting and harvesting campaigns of 2026, when fuel demand seasonally rises. The situation in the Russian oil products market is under constant government control – any signs of a new price spike will be met with additional interventions. These efforts aim to guarantee uninterrupted fuel supply for the economy and population at acceptable prices despite external challenges and global oil market volatility.
