Energy Outlook 2026: Abundant supply amid a challenging transition in Oil & Companies News 27/01/2026 Executive summary Energy markets enter 2026 in a markedly more comfortable supply environment. Across the system, 2026 will be defined by the contrast between traditional energy abundance and the slower, more complicated rollout of transition technologies. Oil: rising supply meets modest demand Oil markets look decidedly bearish this year as OPEC+ ramps up production, pushing the global market into a sizeable surplus throughout 2026. Brent is forecast to average around $57/bbl, with broader pressure on prices and timespreads. Still, geopolitical uncertainty and supply risks could interrupt this bearish trend. Gas: LNG expansion pushes Europe towards oversupply European natural gas supply is set to improve in 2026 as LNG exports, especially from the US and Qatar, increase. TTF prices may average €30/MWh, with possible summer dips. Short-term volatility remains due to low storage, but the EU’s Russian gas ban appears manageable with new LNG projects coming online. CO₂: EU ETS supply tightens sharply Europe’s carbon market will tighten sharply in 2026, with effective supply falling due to Market Stability Reserve (MSR) placements, maritime allowance cancellations, and the possibility of fewer REPowerEU auctions. Prices are projected to average €84/tonne, but high speculative activity and policy uncertainties, such as delayed free allowance phase-outs, pose downside risks. Nonetheless, structurally, EU ETS supply is set to remain tight, supporting higher prices. Renewables: solid growth but increasingly complex deployment Solar and wind will see robust growth in 2026, but deployment is increasingly complicated by grid constraints, trade policies, and cost pressures. China dominates both solar and wind with a focus on industrial competitiveness. Europe and the US follow with different drivers: energy security in Europe and AI‑driven power demand in the US. While battery storage and manufacturing policy are playing a growing role, challenges with supply chains and economics persist. Despite these hurdles, renewables remain the fastest-growing part of the global energy landscape. Carbon Capture and Storage: a year of value‑chain alignment In 2026, CCS focuses on building transport and storage infrastructure, but capture deployment remains slow due to high costs and weak demand. Integrated value-chain models are emerging, with stronger policy support in Europe and revised incentives in the US. However, faster capture investment requires clearer mandates and stronger demand-side policies. Hydrogen: progress stalled as costs rise and off-take lags Hydrogen’s rapid growth hopes have faded, with the sector stuck in a pilot phase. Costs remain high, demand is weak, and government support has dropped. This year, the world’s attention turns to China, which has elevated hydrogen as a core pillar of its 15th Five‑Year Plan. China’s large‑scale electrolyser buildout and new subsidy schemes could redefine global cost curves. However, trade restrictions mean Europe and the US may not fully benefit. In 2026, the focus is on advancing pilot projects toward final investment decisions, not on large-scale expansion. European Utilities: stable cash flows, rising investments, and funding challenges For Europe’s utilities, 2026 brings steadier earnings but persistent financial pressure. Total sector investment is set to increase by 6%. Network operators face the l