Current News in the Oil, Gas, and Energy Sector for Thursday, December 18, 2025: Oil, Gas, Electricity, Renewable Energy, Coal, Refineries, and Key Global Energy Market Events.
Oil and Oil Products
The global oil market remains under pressure: Brent crude is hovering near $60 per barrel, and WTI is trading around $55 per barrel, marking the lowest levels in several years. The main factors contributing to the decline in oil prices include:
- Expected oversupply: The forecast for 2026 anticipates production to exceed demand, as non-OPEC countries have ramped up production to record levels.
- Hope for peace in Ukraine: Progress in negotiations between Russia and Ukraine has led to expectations of eased sanctions and a potential return of some Russian oil exports to the market.
- OPEC+ policy: After months of gradual production increases, the OPEC+ alliance has decided to pause in Q1 2026, signaling caution amid the risk of overproduction.
As a result of these factors, oil prices have significantly decreased compared to the beginning of the year. Brent and WTI may finish 2025 at the lowest values since 2020. The decline in crude prices is already reflected in the oil product markets: gasoline and diesel have also dropped in price. In the U.S., retail gasoline prices have decreased in most states ahead of the holiday season, reducing consumer spending. European refiners, having switched to alternative oil instead of Russian supplies, are operating with a stable supply of feedstock. Global refineries are generally maintaining a high level of processing, benefiting from cheaper oil prices, although fuel demand is growing at a moderate pace. The refining margin remains stable, and no new shortages of gasoline or diesel are observed on the global market.
Gas Market and LNG
The gas market presents a paradox: despite an early and cold winter, natural gas prices in Europe continue to decline. Prices at the Dutch TTF hub have fallen below €30 per megawatt-hour, marking the lowest level since spring 2024. This is nearly 90% lower than the peak crisis levels of 2022 and 45% lower than prices at the beginning of 2025. The main reason is the avalanche of LNG imports, particularly from the U.S., which compensates for reduced pipeline supplies from Russia. Gas storage facilities in the European Union are filled to about 75%, which, although below the historical average levels, along with record LNG imports, provides sufficient resources for stable pricing.
- Europe: High LNG volumes are lowering gas prices, even with reduced storage levels. In 2025, the U.S. accounted for over half of European LNG imports, redirecting supplies from Asian markets. This has led to a sharp narrowing of the spread between European prices and cheaper U.S. gas.
- U.S.: In North America, gas futures have risen amid forecasts for abnormally cold weather. Henry Hub prices have risen above $5 per MMBtu due to the threat of a polar vortex and heightened heating demands. However, overall domestic production in the U.S. remains at high levels, restraining price increases as weather normalizes.
- Asia: The Asian gas market is relatively balanced as the year ends. Demand in key countries (China, South Korea, Japan) has been moderate, allowing for redirection of additional LNG shipments to Europe. Prices at Asian hubs (e.g., JKM) have remained stable without sharp fluctuations, as competition for cargoes between Europe and Asia has eased compared to 2022.
Thus, the global natural gas market is entering winter with greater confidence than the previous year: the supplies and imported shipments are adequate to meet demand even during cold spells. The flexibility of the LNG market plays a crucial role, as tankers can swiftly change direction towards Europe, smoothing regional imbalances. With average temperatures remaining stable, the price situation for gas consumers is expected to remain favorable.
Coal Sector
The traditional coal segment reached a historical peak in consumption in 2025; however, the outlook suggests a coming slowdown. According to the International Energy Agency (IEA), global coal consumption in 2025 increased by about 0.5% to a record 8.85 billion tons. Coal remains the largest source of electricity generation globally; however, its share is expected to decline: the IEA predicts that coal demand will plateau and gradually decline by 2030 due to the growth of renewable energy and nuclear power generation. Regional trends are, however, divergent:
- India: Coal consumption has decreased (for only the third time in the last 50 years) due to an unusually strong monsoon season. Abundant rains have boosted hydroelectric generation and cooled demand for electricity from coal-fired power plants.
- U.S.: In contrast, coal use has risen. This has been driven by higher natural gas prices in the first half of the year and political support for the sector. The new administration in Washington has halted the retirement of several coal power plants, temporarily increasing domestic demand for coal for electricity.
- China: The world's largest consumer of coal has maintained consumption at last year's levels. China burns 30% more coal than the rest of the world combined; however, a gradual decline in usage is expected by the end of the decade as massive capacities in wind, solar, and nuclear power are brought online.
Thus, 2025 is likely to be peak year for coal. Increased competition from gas (where feasible) and particularly renewable energy will push coal out of the energy balance of many countries. Nevertheless, in the short term, coal remains in demand in developing Asian economies, where energy consumption growth continues to outpace the construction of new clean capacities.
Electricity and Renewable Energy
The electricity sector continues to transform under the influence of climate agendas and fluctuations in fuel prices. In 2025, the share of renewable energy sources (RES) in global electricity generation reached new heights: many countries introduced record capacities of solar and wind power plants. For example, China has been aggressively increasing solar generation, while Europe and the U.S. have introduced new offshore wind farms and photovoltaic projects, stimulated by government support and private investment. By the end of the year, global investment in green energy remains high, approaching levels similar to fossil fuel investments.
However, the rapid development of RES poses challenges for ensuring the stability of power systems. This winter, Europe experienced variability due to weather factors: periods of low wind and short daylight hours increased the load on traditional generation. At the beginning of winter, EU countries were compelled to increase gas and coal generation due to low wind generation amid an anticyclone. This temporarily raised electricity prices in certain regions. Nevertheless, thanks to the growth of RES capacities combined with a high share of gas in the mix, there have been no significant supply issues. Governments and energy companies are also investing in energy storage systems and grid modernization to smooth peaks and integrate renewable energy.
Climate commitments continue to drive the trend: at the recent global climate summit (COP30) in Brazil, calls were made to accelerate the energy transition. A number of countries have agreed on measures to triple the introduction of RES by 2030 and enhance energy efficiency. Additionally, there is a revival of interest in nuclear energy: in various regions, new nuclear power plants are being constructed and existing ones are being extended to ensure baseload generation without emissions. Overall, the electricity sector is moving towards a cleaner and more sustainable future, although the transition period requires balancing reliability of supply and environmental goals.
Geopolitics and Sanctions
Geopolitical factors continue to have a strong impact on energy markets. Central to this is the conflict in Eastern Europe and the associated sanctions:
- Peace negotiations: In December, there has been the most significant progress in dialogue regarding the resolution of the situation in Ukraine since the beginning of the conflict. The U.S. expressed willingness to provide Ukraine with security guarantees similar to NATO's, while European diplomats reported constructive talks. Expectations for a potential ceasefire have increased, although Russia asserts it will not make territorial concessions. Growing hopes for an end to hostilities have ignited discussions about the prospect of lifting or easing oil and gas sanctions against Russia in the future.
- Pressure through sanctions: At the same time, Western countries are indicating their readiness to intensify pressure if the peace dialogue reaches a stalemate. Washington, in particular, has prepared another package of sanctions against Russia's energy sector, which could be enforced if Moscow refuses the proposed terms of a peace agreement. Earlier in the autumn, the U.S. and the UK had already imposed additional restrictions on Russian energy giants "Rosneft" and "Lukoil," complicating their ability to attract investment and technology.
- Infrastructure risks: Ongoing hostilities and sabotage continue to threaten energy supply. In the past week, Ukraine has intensified drone attacks on oil infrastructure deep within Russia. In particular, fires occurred at refineries in Krasnodar Krai and on the Volga as a result of drone strikes. Although these incidents have a minor localized impact on the overall fuel supply, they underscore the ongoing military risks to the industry until a durable peace is achieved.
- Venezuela: In Latin America, geopolitics also plays a role in oil markets. After partial easing of sanctions against Venezuela in the fall, the United States has intensified oversight of compliance with the deal's conditions. In December, an incident occurred involving the detention of a tanker carrying Venezuelan oil due to suspected violations of the licensing terms. The state-owned company PDVSA faced demands from clients to increase discounts and alter delivery terms. This complicated the growth of Venezuela's exports, despite the recent U.S. authorization to temporarily increase production in exchange for political concessions from Caracas.
Overall, the sanctions standoff between Russia and the West, along with other international disputes, continues to inject uncertainty into the global FEC. Investors are closely monitoring news from the political fronts, as any changes—ranging from breakthroughs in peace negotiations to the imposition of new restrictions—can significantly impact the prices of oil, gas, and other commodities.
Corporate News and Projects
Major oil and gas companies and energy projects around the world are wrapping up the year with a number of significant events and decisions:
- Shell exits German refinery: British-Dutch Shell has resumed efforts to sell its stake (37.5%) in the Schwedt oil refinery in Germany. This refinery was previously controlled by "Rosneft" and came under the management of the German government after 2022. Shell is seeking a buyer by the end of January, aiming to completely distance itself from an asset associated with sanction risks.
- Middle Eastern expansion: In Kuwait, service oil and gas company Action Energy (AEC) has successfully conducted an initial public offering on the local stock exchange and announced plans for regional expansion. The raised funds will be directed towards expanding drilling and field services in Kuwait and neighboring countries, where oil and gas production is on the rise. This move reflects the strengthening position of the Middle Eastern business amid increased oil production in the region.
- New gas deals in Europe: European buyers continue to diversify gas supply sources. The Hungarian state corporation MVM entered into a 5-year contract with American Chevron for the supply of liquefied gas amounting to approximately 2 billion m3 annually. This LNG will be delivered through terminals in Europe, reducing Hungary's dependence on pipeline gas and strengthening the country's energy security. The deal demonstrates deepening cooperation between the U.S. and Eastern Europe in the gas market.
Overall, oil and gas companies are adapting to the new market reality: some are reassessing assets and portfolios in light of geopolitical risks (as Shell is in Europe), while others are leveraging favorable conditions for growth (as Middle Eastern players). Simultaneously, investments continue in both traditional oil and gas projects and in energy transition initiatives. Industry giants are required to balance short-term profitability with long-term decarbonization trends, which is defining key strategic decisions in the FEC as we approach 2026.
