Energy Sector News for Sunday, December 7, 2025: Oil and Gas Prices, OPEC+ Decisions, Sanction Pressure on the Russian Energy Sector, Fuel Situation in Russia, Roles of the EU, US, China, and India, Trends in the Coal Market, Renewables and Oil Products — Analytical Review for Investors and Stakeholders in the Global Energy Sector.
Key events in the global fuel and energy complex (energy sector) as of December 7, 2025, show that world markets continue to balance between resource oversupply and geopolitical risks. Oil prices remain around their lowest levels in the past two years: Brent crude is trading at approximately $62–64 per barrel, while American WTI is around $59. These levels are significantly lower than mid-year figures, as the market is pressured by increased supply amid relative stability in demand and cautious optimism regarding potential progress in peace negotiations over Ukraine. The European gas market enters winter with no signs of shortage: underground gas storage in the EU remains about 75–80% full, and wholesale prices (TTF hub) are being maintained around €28–30 per MWh, which is significantly lower than the extreme peaks of previous years. Record LNG supplies and mild early season weather ensure stability and relatively low gas prices.
Meanwhile, geopolitical tension surrounding energy markets persists. Western countries are not easing sanctioned pressure on the Russian oil and gas sector: the European Union is legally forming a complete ban on the import of Russian pipeline gas by 2027 and is seeking to accelerate the reduction of oil purchases from Russia. Diplomatic attempts to achieve a breakthrough in the resolution of the conflict have so far failed to yield tangible results, although the US and Ukraine held consultations on a peace plan in early December. Supplies of energy resources remain at risk due to potential military incidents; however, the global market is currently compensating for local disruptions. Inside Russia, authorities are extending emergency measures to stabilize the fuel market following the autumn gasoline and diesel shortage — oil product exports remain strictly limited to saturate the domestic market. At the same time, global energy is accelerating its "green" transition: investments in renewable energy sources are hitting new records, and leading economies are announcing ambitious plans to reduce dependence on fossil resources.
Oil Market: Prices at Two-Year Lows Due to Oversupply and Hope for Peace
- Global Supply: The global oil market remains oversaturated. OPEC+ countries and other producers collectively extract more oil than the market consumes at the current demand level. Commercial stocks of crude oil in key regions are at high levels, thereby intensifying downward pressure on prices.
- OPEC+ Decisions: The cartel and its allies are showing caution. At the last meeting, leading OPEC+ members agreed to maintain the production quotas for Q1 2026 at levels seen in December 2025, effectively extending current limitations. If necessary, the coalition is prepared to adjust production quickly: a reserve capacity of about 1.65 million barrels per day could be gradually returned to the market as conditions require.
- US at Peak Levels: Oil production in the United States is nearing record levels. Despite a reduction in the number of active rigs, technological efficiencies enabled US production to hit new highs in mid-2025 (with continental states exceeding 11 million barrels per day). The high level of production in the US adds significant volumes to the market, offsetting part of the OPEC+ cuts.
- Local Disruptions: Recent incidents have only briefly affected exports. In early December, Ukrainian drones damaged one of the KTK docks on the Black Sea, through which Kazakh oil is exported; however, shipments quickly resumed through a backup terminal. Additionally, Libya's largest oil loading terminals were temporarily closed on December 5-6 due to storms. These events did not lead to a spike in prices—the market can absorb short-term stoppages, given the current balance of supply and demand.
- Price Benchmarks: Brent remains in a narrow range of $62–64 per barrel (over 20% lower than levels at the beginning of autumn). Investors expect prices to remain subdued in the near future: no sharp revival in demand can be seen, and the easing of US monetary policy only moderately supports raw materials markets. At the same time, any new geopolitical shock (escalation of conflict or significant disruptions in production) could provoke a temporary price spike.
Gas Market: Europe Enters Winter with Comfortable Reserves and Low Prices
- High Storage Levels: By early December, European gas storage facilities are approximately 75-80% full. Stocks are gradually declining with the onset of colder weather, but still significantly exceed average levels for this time of year. The created safety buffer sharply reduces the risk of gas shortages in mid-winter.
- Record LNG Imports: Liquefied natural gas supplies to Europe remain at historically high levels. Reduced demand for LNG in Asia has freed up additional volumes for the European market, partly compensating for the cessation of pipeline supplies from Russia. A particularly important role is played by the US, which has increased LNG exports and become a key external gas supplier for the EU amid growing demand.
- Diversification of Sources: European countries are strengthening energy security through alternative suppliers. Gas purchases from Norway, Algeria, Qatar, Nigeria, and other regions have increased. New infrastructure—from LNG terminals to international interconnectors—is operating at full capacity, ensuring a stable flow of fuel from various parts of the world.
- Low Prices: Wholesale gas prices in the EU are now significantly below the peak values of 2022. The Dutch TTF index remains below €30 per MWh (around $330 per 1,000 cubic meters) and has continued to decline gently for the third consecutive week. Despite seasonal increases in demand and periodic declines in renewable energy generation, the market remains balanced due to abundant supply. No new price surges are currently forecast.
Russian Market: Fuel Shortages and Extension of Export Restrictions
- Ban on Gasoline Exports: The Russian government imposed a temporary total ban on the export of automotive gasoline by all producers and traders (except for minimal supplies under intergovernmental agreements) back in late August. Initially intended to last until October, the autumn fuel crisis necessitated extending the ban: in fact, it remains in effect until the end of the year, to maximize domestic gasoline supply.
- Restrictions on Diesel: Simultaneously, the export ban on diesel fuel for independent traders has been extended until the end of 2025. Oil companies with their own refineries are allowed limited diesel exports to prevent processing stoppages due to tank overfill. These measures aim to prevent a repeat of fuel shortages in the domestic market, which caused a spike in wholesale prices in autumn.
- Stabilization at Home: Thanks to the measures taken, the situation at gas stations has noticeably improved. Prices for gasoline and diesel fuel domestically have retreated from September peaks and have stabilized under government control. Long-term regulatory mechanisms are being considered— such as adjusting price dampers, subsidized loans for independent gas stations, and changing the tax burden—to avoid new supply disruptions in the future.
- Production and Redirecting Exports: Russian oil production at the end of 2025 remains around 9.5 million barrels per day, complying with OPEC+ quotas. At the same time, oil exports are being redirected from the European direction towards the Asian market: buyers from India, China, and other Asian countries are purchasing Russian oil at discounts to world prices. In the gas sector, pipeline gas exports to Europe have decreased to minimum levels, but deliveries to China via the “Power of Siberia” pipeline have reached unprecedented levels, partially compensating for lost markets.
Sanctions and Policy: Increasing Western Pressure Amid Attempts at Dialogue
- Long-term EU Restrictions: Brussels is solidifying legal steps to cease Russian energy imports. On December 4, EU institutions agreed on regulations strategizing complete cessation of Russian pipeline gas imports by November 1, 2027. Concurrently, EU countries intend to accelerate the reduction of remaining purchases of Russian oil and oil products, despite potential costs for their refineries.
- Measures from the G7: The G7 and its allies maintain strict sanctions against the Russian energy sector. A price cap on Russian oil remains in effect, alongside an embargo on many types of oil products. Financial restrictions complicate transactions and insurance for deals involving Russian oil and gas. Although some Asian importers continue to increase purchases from Russia in circumvention of restrictions, the collective West shows no signals of willingness to ease the sanctions regime until the conflict is settled.
- Diplomacy and Negotiations: In the past week, the US and Ukraine held several rounds of consultations on a peace settlement, developing the framework for a potential agreement. These contacts have generated cautious optimism regarding the potential prerequisites for initiating a peace process. However, Russia is not participating in these negotiations, and hostilities continue without significant reduction in intensity. There are currently no real grounds for lifting sanctions or relaxing geopolitical confrontations.
- Market Risks: The situation remains tense. Attacks on energy infrastructure within the context of the conflict continue: assaults on oil terminals, gas facilities, and electrical grids increase uncertainty. Any escalation affecting export routes (e.g., oil transit across the Black Sea or residual gas supplies via Ukraine) could destabilize markets. Nevertheless, the global energy supply system currently demonstrates resilience to local shocks, and market participants hope to avoid direct NATO and Russian confrontations that could trigger a global energy shock.
Asia: India and China Strengthen Energy Security
- India's Position: Under Western pressure, New Delhi temporarily curtailed purchases of Russian oil in late autumn; however, India remains one of Moscow's largest clients overall. Indian refineries actively process available Urals oil at privileged prices, covering domestic fuel needs. Surplus oil products are exported by Indian companies, including to Europe, effectively delivering Russian barrels to end consumers after processing.
- China's Strategy: Despite economic slowdown, Beijing retains a key role in the global energy market. Chinese importers are diversifying supply channels: new long-term contracts for LNG purchases have been secured (with Qatar, the United States, and others), and pipeline gas supplies from Russia are increasing (with volumes via the Power of Siberia reaching record levels this autumn). At the same time, China is boosting strategic oil reserves and incentivizing increased domestic extraction, aiming to reduce dependence on external sources.
- Growing Demand: Developing economies in Asia continue to increase energy resource consumption. In 2025, regional demand for oil and natural gas rose, although its growth has slowed due to last year's high prices and more moderate GDP growth. India demonstrates consistent increases in fuel usage (gasoline, diesel) as its vehicle fleet and industrial activities expand. China is focusing on gasification and electrification of its economy, maintaining high demand for natural gas and electricity. The long-term goal of both countries is to meet energy consumption without undermining environmental objectives, leading to accelerated growth in renewable energy capacities.
Renewable Energy: Record Investments Supported by Governments
- Record Growth: 2025 has become another record year for investment in renewable energy sources. According to analysts, global investments in “green” energy exceeded $1 trillion, surpassing capital investments in fossil fuels. Renewable energy capacities are growing at unprecedented rates: globally, over 300 GW of new solar and wind power plants have been commissioned in the year, exceeding last year’s figures.
- Climate Policy: At the COP30 climate summit held in November in Brazil, the global community confirmed its commitment to accelerate the energy transition. Countries agreed to strive for tripling the installed capacity of renewables by 2030 and set an annual funding target for climate initiatives of $1.3 trillion. Multiple states and companies announced new emission reduction goals and increases in the share of clean energy, reinforcing their commitments with subsidies and tax incentives.
- New Projects: Large-scale clean energy projects are being implemented worldwide. In Europe, new offshore wind farms have been commissioned. In China and India, giant solar farms are under construction, and the first hydrogen hubs powered by solar and wind energy are being launched in the Middle East. The boom in energy storage systems is ongoing: many countries are introducing large battery complexes to smooth out the irregularities of renewable energy generation. Despite economic challenges, investors continue to show high interest in the “green” sector, anticipating long-term returns from low-carbon projects.
Coal Sector: High Demand Sustains the Market, but the Peak Has Passed
- Asian Demand: China, India, and Southeast Asian countries remain the largest consumers of coal. In 2025, global coal consumption remains close to historical highs, driven by these regions, where coal continues to dominate electricity generation. Developing economies are reluctant to abandon cheap coal, particularly amidst rising energy needs, using it to meet the base load of their energy systems.
- Signs of a Plateau: Despite high demand volumes, market growth for coal is slowing. Analysts indicate that global coal consumption has likely peaked and will begin to decrease in the coming years as new renewable and gas-fired power capacities come online. In several countries, a decline in coal output is already being observed: in the US and Europe, coal-fired power plants are continuing to shut down, while China is reducing plans for new coal mines and stations in line with stated carbon neutrality goals.
- Prices: Global coal prices have stabilized after the turbulent rise in 2022. The benchmark thermal coal index (ARA, Europe) stands at around $95–100 per ton, significantly lower than last year's peak values. In Asia, prices have also decreased due to improved logistics and increased supply from the largest exporters (Australia, Indonesia, Russia). No significant price spikes are forecast unless an extremely cold winter or other unforeseen events occur.
- Pressure from the Energy Transition: The coal industry is feeling increasing pressure from environmental regulations. International banks and funds are increasingly declining to finance coal projects; investors demand companies implement emission reduction strategies. Even coal-dependent countries are declaring plans to gradually decrease the share of coal-generated power by the 2030s. All of this indicates that the global “coal peak” is near or has already been surpassed, and the role of coal will gradually decline in the long term.
Oil Products and Refineries: Diesel Demand Rising, Gasoline Stagnating
- Distillates on the Rise: Global consumption of distillate fuels—primarily diesel and aviation fuel—continues to increase. Global air transport has nearly recovered to pre-crisis levels, spurring growth in demand for aviation kerosene. Diesel fuel remains essential for transport and industry: expanding logistics, agriculture, and construction in developing countries supports high diesel demand. Refineries in many regions are increasing diesel fraction yields to take advantage of favorable market conditions.
- Gasoline: Gasoline consumption in developed countries has peaked and started to decline. Improvements in fuel efficiency of vehicles, rising sales of hybrid and electric cars, and environmental regulations in cities are reducing gasoline demand in Europe and North America. In developing economies (Asia, Africa, Latin America), gasoline usage is still rising together with vehicle mobilization. Globally, however, the gasoline market is in stagnation, prompting refiners to adapt to new realities.
- Refinery Adaptation: The oil refining industry is adapting to structural shifts in demand. New high-tech refineries in Asia and the Middle East are focusing on producing in-demand products—diesel fuel, aviation kerosene, and naphtha for petrochemicals. Simultaneously, older facilities in OECD countries continue to be phased out due to low margins and tightening environmental standards. In 2025, the global volume of oil refining grew slightly compared to last year, although investments are primarily concentrated in regions with growing demand, whereas in Europe and the US, industry capital is shifting towards the production of biofuels and petrochemicals.
Companies and Investments: Industry Consolidation and Diversification of Projects
- Russian Players: Energy companies in Russia are adapting to sanctions and relying on domestic resources for development. Gazprom Neft is planning to issue ruble bonds worth up to 20 billion rubles with a floating rate linked to the Central Bank’s key rate to raise financing in the context of closed external capital markets. Rosneft is promoting the East Oil megaproject in the Arctic, building infrastructure for the exploration of giant fields in the Taymyr region; it is expected that by the end of the decade, this project will significantly increase oil production.
- Strategies of Majors: Western oil and gas giants (ExxonMobil, Chevron, Shell, BP, etc.) maintain spending discipline amid low prices. They focus on projects with maximum returns and limit capital expenditure growth, prioritizing shareholder value—paying stable dividends and conducting buybacks. Consolidation continues: in the US, major transactions have occurred over the past two years (ExxonMobil acquired shale company Pioneer Natural Resources, Chevron acquired Hess), strengthening the positions of supermajors and their resource base.
- The Middle East and New Directions: State companies from the Gulf actively invest in both traditional oil and gas as well as new sectors. Saudi Aramco, ADNOC, and QatarEnergy are expanding oil and gas production, building refineries and petrochemical complexes while simultaneously funding projects in hydrogen, carbon capture, and renewable energy. Oil exporters are thus diversifying their business models in preparation for a gradual transition of the global economy to low-carbon sources. Overall, global investments in oil and gas exploration and production in 2025 showed moderate growth compared to recent lows, reflecting cautious optimism in the industry regarding future demand for hydrocarbons.
