Oil and Gas News, Tuesday, December 2, 2025 — Ukraine Negotiations, Markets, and COP30 Outcomes

Current News in the Oil, Gas, and Energy Sector as of December 2, 2025: Market Situation, Renewable Energy Updates, Geopolitics, Investments, and Key Global Events in the Energy Sector.

Oil Market

• OPEC+ maintained its current production levels at the November meeting for Q4 2025 and Q1 2026. This decision signifies the continuation of existing cut schemes (approximately 3.2 million barrels per day) amidst forecasted demand slowdown.
• The U.S. is producing a record volume of oil (~13.8 million b/d), while commercial oil inventories continue to rise. Increased domestic stocks in the U.S. and elsewhere are capping further rises in global fuel prices.
• The incident in Novorossiysk: Ukrainian drones damaged one of the Caspian Pipeline Consortium (CPC) docks, reducing oil shipments to the port. This incident temporarily decreased CPC exports (approximately 1% of global supply), causing short-term price fluctuations.
• Geopolitics: Negotiations regarding Ukraine remain a key factor. The prospect of a peaceful resolution could eventually ease sanctions against Russia and increase oil and gas supplies. At the same time, the risk of new restrictions and asset reorganization continues to contribute to uncertainty in the sector.

Gas Market

• European inventories: By the start of the heating season 2025/26, EU gas storage facilities were filled to about 75–80% of capacity, significantly higher than average levels. This reduces the risk of gas shortages and keeps prices low (TTF ~30 €/MWh).
• LNG imports: Europe is actively increasing its imports of liquefied natural gas. The commissioning of new terminals in the U.S. and Australia, as well as reduced demand from Asia, has provided additional LNG volumes to the EU. In 2025, LNG flows to Europe significantly increased, aiding in the diversification of supplies.
• Russian supplies: Russia is pivoting focus towards Asian markets. Exports through the "Power of Siberia" pipeline to China are rising, while the "Power of Siberia-2" project is anticipated to launch in 2026. Gazprom is negotiating contract extensions with Turkey, maintaining exports through the "TurkStream." Traditional pipelines to Europe are currently operating at reduced capacities.
• Domestic demand: In Germany, gas consumption has significantly increased due to reduced wind and hydroelectric production. This hampers storage filling rates and creates local pricing pressure in the region, although the overall European system is receiving necessary imports.

Electricity and Renewables

• Record growth in renewables: Renewable energy sources are adding capacity at unprecedented rates. Solar and wind generation in many countries have outstripped electricity demand growth, stabilizing global CO₂ emission levels for the first time. China and the U.S. continue to lead in expanding "clean" energy, while Europe is gradually adjusting its support programs.
• Infrastructure investments: Following COP30, global energy companies and governments announced plans for significant funding for grid modernization and storage solutions. Just the energy giants alone pledged approximately $148 billion annually for new transmission lines and energy storage systems, which will better integrate variable energy sources.
• EU Policy: Brussels continues its course towards energy independence. New measures under REPowerEU include a phased cancellation of Russian gas and oil imports by 2027, extended storage filling mandates until the end of 2027, and increased funding for energy efficiency and clean energy projects. Accelerated construction of new renewable energy projects and networks is under discussion.
• Nuclear program: Despite focusing on "green" energy, countries are not abandoning nuclear energy. A recently published EU report indicates that investments in nuclear power plants (extending lifespan and constructing new ones) will require around €241 billion by 2050. Concurrently, plans for small modular reactors (SMR) and hydrogen technologies are being developed as “bridges” to a carbon-free economy.

Coal Sector

• Long-term contracts in Asia: Many Asia-Pacific countries are still forced to maintain high coal consumption. Agreements made years ago guarantee the operation of coal-fired power plants for decades, regardless of wind or solar availability. Experts estimate that coal continues to account for a significant share of generation in Southeast Asia, although the global share of coal is gradually declining.
• Global trends: Despite this, several major economies have announced a phased exit from coal. The Chinese market is showing initial signs of reduced emissions due to record renewable energy generation: in 2025, coal emissions fell for the first time. South Korea, India, and several European countries announced new targets to reduce coal generation and increase the share of "clean" energy.
• Climate commitments: The final document from COP30 notably omitted direct mention of "coal" (due to pressure from exporting countries), but individual nations announced their own measures. South Korea, for instance, will cease construction of new coal-fired power plants and gradually phase out existing ones. Additionally, an international methane reduction fund was launched at the summit (with a contribution of £25 million), signaling a shift towards cleaner energy sources.

Refined Products and Refineries

• Changing demand: Demand for refined products is shifting unevenly. Diesel and jet fuel are recovering faster due to increased freight transport and the resumption of air travel, while gasoline demand is recovering more slowly. This shift in demand is prompting refineries to adapt product output (increasing the share of diesel and jet fuel).
• Refining: Refineries in Asia and the Middle East are operating nearly at full capacity due to high crude supply. This instills confidence in refined product exports but pressures margins due to the surplus of crude. In Europe, some refineries have switched to processing oil types that are not subject to sanctions, although overall refineries remain highly utilized.
• Sanctions: Restrictions on Russian refined products continue to impact the balance. The EU and U.S. have imposed a ban on diesel and jet fuel imports from Russia, prompting some refineries to seek alternative supplies. These measures keep prices in check amid a crude surplus while simultaneously encouraging companies to accelerate the development of alternative fuels and comprehensive waste product recycling.

Companies and Investments

• Exploration and projects: Europe is gradually easing restrictions on drilling. In Greece, a license for offshore gas exploration was granted to Exxon/Energean for the first time in 40 years in November, while companies like Shell and Chevron in Italy and the UK are obtaining or expecting approvals to expand existing fields. These steps reflect a new approach to domestic resource exploration.
• M&A activity: The segment remains active. Targa Resources acquired gas transport assets in the Permian Basin for $1.25 billion, strengthening its pipeline network in the U.S. Oil traders (such as Gunvor and Vitol) are eyeing participation in U.S. shale projects, aiming to diversify their portfolios and secure long-term fuel supplies.
• LNG projects: Investors are revising long-term investment strategies. The British government has decided against financing $1.15 billion for an LNG project in Mozambique due to safety risks and shifts in the global agenda. TotalEnergies is preparing to resume work on this project, but timelines and funding volumes are subject to reassessment.

Geopolitics and Regulation

• Sanctions and agreements: Negotiations concerning Ukraine continue to set market dynamics. While no concrete agreement exists yet, discussions include plans for further tightening sanctions against Russia post-2025. The EU has already extended mandatory gas storage norms until the end of 2027 and announced new incentive measures for green projects, striving to ensure energy independence.
• International cooperation: G20 countries and COP30 participants agreed to increase funding for climate programs. Estimated needs for assisting developing countries to meet climate goals by 2030 reach $2.4 trillion annually. China and India confirmed their readiness to play a key role in expanding renewable energy, while developed nations promised additional investments in clean technologies.
• Regional initiatives: New organizations are forming at the alliance level. The EU has established a Platform for Energy and Raw Materials to jointly procure critical resources (hydrogen, natural gas, etc.). In Asia, cooperation is growing to create regional gas markets and develop green funds. Many countries are drafting national decarbonization roadmaps, introducing tax and subsidy incentives for transitioning to clean energy.
• Technological standards: Concurrently, emissions regulations are being refined. The U.S. is tightening methane emissions standards in oil and gas fields, while the EU is advancing clean energy support mechanisms through carbon pricing and quotas. These measures are aimed at accelerating the transition to a "green" course and are influencing companies' investment strategies worldwide.