Supply tightness meets climate stress

Energy markets entered the new year facing renewed volatility as cold weather patterns across parts of Europe and Asia pushed up demand for gas and electricity. Analysts said storage levels were adequate but uneven, leaving some regions exposed to price spikes during sustained cold spells. Renewable output, particularly wind, showed sharp regional variation.

Governments have leaned on emergency reserves while urging conservation. Utilities warned that while blackouts are unlikely, cost pressures could feed into inflation during the first quarter.

Transition pressures

The situation underscores the challenge of balancing energy transition goals with short-term reliability. Investments in grids and storage have not kept pace with demand growth, according to industry groups. Policymakers face pressure to accelerate clean energy deployment while maintaining backup capacity for extreme weather events.