Oil and Gas Sector News for Monday, December 29, 2025. Global Oil and Gas Markets, Electricity, Renewable Energy Sources, Coal, Oil Products, and Refineries: Key Events, Trends, and Investor Expectations.
This edition provides an overview of key events in the fuel and energy complex (FEC) at the end of 2025 and investor expectations for 2026. Global oil, gas, and electricity markets are stabilizing after a tumultuous year: following summer demand lows, prices have begun to grow moderately. Geopolitical uncertainties persist, but some optimists hope for an easing of sanctions and a restoration of normal exports. Meanwhile, there is a growing trend towards ramping up production and expanding "green" energy, while coal and gas remain essential for maintaining energy balance during peak loads.
Global Oil Market: Moderate Growth Amid Supply Surplus
Brent is trading at around $61–63 per barrel, while WTI hovers around $57–59, which is 15–20% lower than a year ago. The oil market is demonstrating relative stability after a decline in demand throughout 2025. Key influencing factors include:
- OPEC+ Policy: At the end of November, OPEC+ countries decided to maintain production levels consistent with the end of 2025, forgoing planned quota increases for Q1 2026. This resulted in limited price growth while keeping the alliance's market share below historical highs.
- U.S. Production Growth: U.S. independent oil producers are expanding shale production, bringing output to a record of ~13 million barrels per day. The oversupply is putting pressure on the price of oil and oil products.
- Global Demand: Oil consumption is growing modestly (with IEA and OPEC estimates projecting an increase of no more than +0.8–1.0% in 2025), significantly slower than the growth rates of 2023. Slower economic growth and energy-saving measures are limiting demand from major consumers, particularly in China.
- Geopolitics and Sanctions: Situations in the Middle East (strikes on oil facilities, escalating conflicts) and Africa occasionally cause price fluctuations, but the global market is responding with restraint. Peace talks regarding Ukraine have created optimism around the potential lifting of some sanctions: for now, Russian oil is being sold at a significant discount (Urals ~$40/barrel, well below Brent).
European Gas Market: Record Stock Levels and Sharp Demand Spikes
The European gas market enters winter with unprecedentedly high stock levels in underground gas storage (UGS), causing prices to drop to yearly lows (TTF fell to ~$330/thousand m3, around €28/MWh). However, New Year frosts have boosted demand: gas withdrawals from storage have reached record levels, and prices rebounded to ~$345/thousand m3. Key trends include:
- Decline in Russian Imports: EU countries have nearly completely phased out Russian pipeline gas, with Russia's share in imports falling to 10–15%. This shortfall is mainly being met by alternative supplies: LNG imports from the U.S., Africa, and the Middle East have ramped up, along with new regasification infrastructure being introduced in Germany and Spain.
- U.S.-EU LNG Deal: The agreement for energy supplies worth $750 billion from 2026 to 2028 is progressing slowly. Due to falling prices, the EU has reduced its volume of U.S. LNG purchases (from September to December 2025, LNG deliveries from the U.S. to the EU amounted to approximately $29.6 billion, significantly lower than annual pledges). Low prices have diminished the economic motivation for higher purchases.
- Weather Risks: Even with high reserves, gas prices respond to extreme cold weather. New price spikes are possible during prolonged frosts. Additionally, environmental restrictions on production (emissions) limit gas production capacity in Europe.
- Demand in Asia: China and India are actively importing LNG for winter needs. China is expanding its domestic production, yet remains the world's largest importer of gas and oil. India is increasing its purchases of cheap gas and oil from Russia, supporting global demand.
Asia: Record Production in China and Growing Imports in India
- China: Domestic oil and gas production is hitting historic highs. For 2025, oil production exceeded 4.3 million barrels per day, and gas production reached new peaks. Beijing is investing in expanding refineries and energy generation capacities, reducing dependence on imports. Economic slowdown has limited internal demand growth, but China remains the largest global buyer of energy resources.
- India: In defiance of U.S. pressures and new restrictions, refineries continue to purchase Russian raw materials. In December, oil supplies from Russia to India are estimated at over 1.2 million barrels per day (having reached a record of 1.77 million in November) as refineries rushed to secure cheap raw materials before new sanctions kick in. Modi and Putin's discussions reaffirmed their commitment to energy partnership.
- South-East Asia: Countries in the region continue to build coal-fired power plants to support industrial needs. High demand for affordable electricity is slowing the shift away from coal – new thermal power stations are being commissioned in Vietnam, the Philippines, and elsewhere.
Renewable Energy: Record Capacities and Investments
The trend towards "clean" energy is intensifying: in 2025, the world installed a record ~750 GW of renewable energy capacity, while investments in "green" energy surpassed $2 trillion. New solar and wind farms are generating a significant portion of electricity in many countries. Important features continue to arise:
- Hybrid Systems: Despite the rapid growth in renewable energy, coal, gas, and nuclear power remain necessary for the reliability of energy systems. Global energy consumption is still approximately 80% based on fossil fuels. During peak load periods (or in calm/nocturnal generation conditions), countries are compelled to resort to gas or coal plants to avoid outages.
- Regional Specifics: Leaders in implementing renewable energy are developed countries and China. The U.S. and EU are introducing subsidy programs for energy storage and localization of renewable energy equipment, while strategic reserves of oil and gas are maintained in case of disruptions. China is simultaneously constructing hydroelectric and nuclear power plants to balance energy systems while supporting hydrocarbon production ramp-up programs.
- Electricity Market: Frequent "overproductions" of renewable energy are leading to decreased electricity prices during peak hours (in Europe and China, negative prices occasionally arise). The increasing share of clean generation is spurring energy storage infrastructure development and grid modernization, as well as a carbon quota market to limit emissions. Overall annual trends confirm a sustained transition, though traditional thermal power stations will remain part of the grid for the foreseeable future.
Coal Market: Stable Demand and Movement Towards "Greening"
Coal continues to play a crucial role in the energy balance. Global coal consumption reached a record ~8.8 billion tons in 2025, up 0.5% from 2024 levels. The primary growth is driven by Asia:
- China and India: These countries continue to actively burn coal for electricity generation and steel production. While some older mines are closing, new large-scale coal-fired power plants are being commissioned (over 50 GW of new projects in China). India is rapidly expanding coal generation to meet rising demand from its economy.
- Exporters and Prices: Indonesia, Australia, Russia, and South Africa maintain high levels of production and supply. Prices for thermal coal have stabilized around $120–140/ton (Newcastle index), which is below last year's peaks but ensures industry profitability. Coal stocks at Asian importers' terminals are sufficient to prevent sharp price fluctuations.
- Phase-Out in Developed Countries: In the U.S. and Europe, coal generation is being actively reduced. Environmental constraints and the rise of renewable energy have led to double-digit reductions in coal's share in the energy balance of the West. However, the global trend towards "greening" is being countered by increased demand in developing countries.
Russian Oil Products Market: Government Measures and Prices
In Russia, following a summer spike in gasoline and diesel prices, the government has taken steps to stabilize the market:
- Fuel Export Restrictions: The ban on the export of gasoline and diesel for most companies has been extended until the end of 2025 (with exceptions for government contracts). This has allowed the release of additional volumes onto the domestic market and held wholesale prices in check.
- Price Stabilization System: From October 1, 2025, the "deviation from normal" for stabilization has been temporarily disregarded for gasoline and diesel. This has increased subsidies for oil refiners and lowered wholesale prices. For instance, the exchange price of AI-95 in mid-December was 8–10% lower than September peaks.
- Current Situation: Wholesale prices for fuel continue to decrease moderately, and there is no shortage in the market. Fuel reserves and supply from refineries ensure stability through January. Authorities consider the situation stable, but are prepared to introduce additional measures should global prices rise.
