Oil and Gas and Energy News — Saturday, December 27, 2025 Global FEC Markets, Oil, Gas, Electricity

Current News in the Oil, Gas, and Energy Sector as of Saturday, December 27, 2025: Oil, Gas, Electricity, Renewables, Coal, Oil Products, and Key Trends in the Global Energy Sector - Overview and Analysis for Investors and Market Participants.

On the diplomatic front, intensive efforts to resolve the protracted conflict in Eastern Europe continue; however, no concrete results have emerged. The United States and European allies have offered Kyiv unprecedented security guarantees in exchange for a ceasefire, instilling cautious optimism about the potential for a peace agreement. Nevertheless, negotiations have ended the year without a breakthrough, and the stringent sanctions regime against the Russian energy sector remains fully in place.

The global oil market is under pressure from oversupply and moderate demand as the year ends. Benchmark Brent crude prices hold steady around $62–63 per barrel—close to the lowest values since 2021, indicating a potential crude surplus. The European gas market shows resilience: even at peak winter consumption, gas storage facilities in the EU are filled to about two-thirds, effectively eliminating the risk of shortages. Stable liquefied natural gas (LNG) supplies and alternative pipeline fuels are keeping wholesale prices at moderate levels, significantly lower than the peaks of 2022, easing the cost burden on consumers.

Meanwhile, the global energy transition is gaining momentum. Many countries are reporting new records in electricity generation from renewable sources, although traditional coal and gas power plants continue to play a crucial role for the reliability of energy systems. Simultaneously, interest in nuclear energy is resurging in several regions as a stable low-carbon energy source capable of reducing dependence on fossil fuels.

OPEC+ Maintains Quotas to Stabilize the Market

• At the December meeting, OPEC+ alliance members decided to maintain current oil production quotas for the first quarter of 2026 to prevent a potential oversupply in the market.
• Since the spring of 2025, OPEC+ countries have collectively returned around 2.9 million barrels per day to the market from previously reduced volumes; however, the overall production restriction of approximately 3.2 million barrels per day remains in effect and has been extended until the end of 2026.
• The meeting was held against the backdrop of a renewed U.S. attempt to achieve a peace agreement between Russia and Ukraine. OPEC+ members recognize that the success of negotiations and potential easing of sanctions could lead to additional oil volumes entering the market, while failure would intensify sanctions pressure and further restrict Russian exports.

Oil Prices Remain Low

Global oil prices are closing out 2025 without sharp fluctuations, consolidating in a relatively tight range due to a balance of stable demand and sufficient supply.

• At the beginning of this week, oil prices rose by about 2% amid strong macroeconomic data from the U.S.: GDP growth in Q3 exceeded expectations, heightening fuel demand forecasts.
• Additional support for prices came from supply disruption risks. New U.S. sanctions against Venezuela's oil sector, along with strikes on maritime export infrastructure in the Black Sea, heightened market concerns regarding supply stability.
• Nevertheless, Brent crude oil prices fell by about 15% for the year. The market exhibited an unusually narrow price corridor (~$60–80 per barrel) even amid geopolitical shocks—largely due to record production in the U.S. (over 13.5 million barrels per day) and increased deliveries from non-OPEC countries compensating for local disruptions.
• Refineries ramped up production of oil products, and commercial stocks of crude oil and fuels in the U.S. increased in December. This kept gasoline and diesel prices from spiking at the year's end, favorably impacting consumers.

Natural Gas: Comfortable Inventories and Stable Prices

The natural gas market is entering winter relatively calmly. In Europe, even cold weather periods have not triggered panic due to high reserve levels and diversified supplies.

• EU countries' underground gas storage facilities are over 70% full by early January, significantly above average historical norms. This buffer reduces the risk of fuel shortages even in the event of further cold snaps.
• LNG imports remain high, compensating for the cessation of pipeline supplies from Russia. Major European consumers (such as Germany, Italy, etc.) are actively purchasing LNG on the spot market, diversifying their energy supply sources.
• In the U.S., natural gas prices (Henry Hub) remain around $5 per million BTU. Record production levels and high LNG export volumes keep balance in the American market, although periods of unusual cold still lead to temporary price spikes.

Geopolitics and Sanctions: Impact on Energy Supplies

Political conflicts and sanctions continue to significantly impact global energy markets, creating both supply disruption risks and hopes for improved situations in the future.

• The U.S. administration has intensified measures against Venezuela's oil sector: sanctions have been imposed on tankers transporting Venezuelan oil. In December, several vessels were detained and forced to return, risking local storage overloads and mandating production cuts in the country.
• Against the backdrop of the ongoing Ukrainian conflict, attacks on energy infrastructure have increased. In November, a Ukrainian drone damaged a terminal in Novorossiysk, reducing December's экспорт of Kazakhstan's CPC Blend oil by about one-third (to ~1.14 million barrels per day) and forcing the redirection of some volumes around the Black Sea.
• Despite the tightening of U.S. sanctions against leading Russian oil companies (such as Rosneft and Lukoil) in the fall, the direct impact of these measures on the global market has been limited. Russian oil exports remain close to multi-month highs due to the restructuring of logistics chains, although the Urals grade is trading at a significant discount to Brent.
• According to Reuters estimates, oil and gas revenues for the Russian federal budget in December 2025 will total about 410 billion rubles, nearly half of what it was a year prior and close to minimum levels in recent years (comparable to the dismal August 2020). Cumulatively, oil and gas revenue for 2025 is estimated at around 8.44 trillion rubles—almost 25% lower than the 2024 level and below the updated forecast of the Ministry of Finance—highlighting the severe impact of low prices and sanctions on Russia's revenues.
• Russia, for its part, does not plan to reduce exports: the pipeline monopoly Transneft stated that oil transport volumes in 2026 will remain at about the same level as in 2025. This indicates an intention to maintain stable supplies of Russian oil to external markets despite sanctions pressure.

Renewable Energy: Records and Investments

The green energy sector continues to experience explosive growth, setting new records for capacity additions and capital investment despite certain political and economic risks.

• The UK recorded a historic peak in wind electricity generation on December 5—approximately 23,825 MW, covering more than half of the country's total demand at that moment. Strong winter winds and the expansion of offshore wind farms facilitated the achievement of this record.
• According to BloombergNEF, global investments in new renewable energy projects reached a record $386 billion in the first half of 2025. The bulk of the funding is directed towards constructing solar and wind power plants, as well as energy storage systems for integrating renewables into energy grids.
• In the U.S., a federal court overturned an earlier ban on constructing new wind energy projects on federal lands and offshore. This decision paves the way for the implementation of major offshore wind farms and supports several states' plans to increase the share of clean energy.
• China continues to lead the world in renewable energy, with a total installed capacity of renewables exceeding 1.88 TW (about 56% of total power plant capacity). The large-scale deployment of solar and wind stations, as well as energy storage systems, has allowed China to keep CO₂ emissions stable despite economic growth.

Nuclear Energy: A Return of Major Capacity

After a long decline, the global nuclear sector is experiencing a revival. Many countries are reassessing the role of nuclear generation as a stable source of low-carbon energy against the backdrop of efforts to reduce dependence on fossil fuels.

• In Japan, preparations are underway for the phased restart of the largest nuclear power plant, Kashiwazaki-Kariwa. The energy company TEPCO received approval from the Niigata prefectural authorities and aims to launch reactor No. 6, with a capacity of 1360 MW—its first reactor brought online since 2011—on January 20, 2026. The full restoration of the 8.2-gigawatt station will occur in stages over several years.
• The Japanese government has announced measures to support the nuclear sector aiming to double the share of nuclear generation in the energy mix. A system of government loans and guarantees for modernizing existing reactors is being introduced; currently, 14 out of 33 reactors, which were shut down after the Fukushima-1 accident, have resumed operations.
• A return to nuclear energy is also observed in other countries. In Europe, Finland has brought a new reactor, Olkiluoto-3, into operation, while France and the UK are investing in modern nuclear power plants, and the U.S. is considering extending the life of existing reactors and funding the development of small modular reactors.

The Coal Sector: Peak Consumption Before Decline

The global coal market hit an all-time high in 2025, but experts anticipate a trend reversal in the coming years. According to the International Energy Agency (IEA), global coal consumption grew by about 0.5% to around 8.85 billion tons for the year. By the end of the decade, a gradual decline in demand for coal is projected, as renewables, nuclear, and natural gas gradually push it out of the energy mix.

• In the U.S., coal consumption at power plants increased in 2025. This was a result of last year's spike in gas prices and an administration directive extending the operation of certain coal-fired power plants previously slated for closure.
• China remains the largest consumer of coal, accounting for about 60% of the country's electricity production. In 2025, demand for coal in China stabilized; a gradual decline is expected by 2030 due to large-scale integration of renewables. Beijing's policy aims to achieve peak emissions by 2030, indicating a reduction in the role of coal in energy production.

Oil Products and Refining: High Margins for Refineries

By the end of 2025, the global oil products market is showing increased profitability for refineries. A decrease in oil prices, coupled with sustained demand for gasoline, diesel fuel, and jet fuel, has driven up refining margins in many regions. Refiners are benefiting from relatively cheap raw materials despite still healthy fuel consumption levels.

• Global indicative refining margins have risen to their highest levels in several years. Diesel fuel sales exhibit particularly high profitability, with strong demand in the transportation sector and industry.
• Active construction of new refineries in Asia and the Middle East (including major complexes in China and Persian Gulf countries) is increasing global oil refining capacity. However, the concurrent closure of outdated plants in Europe and North America helps maintain balance in the oil products market, preventing oversupply and sustaining high margins for operational refineries.
• In Russia, authorities renewed a ban on gasoline and diesel exports following the fuel crisis last summer to saturate the internal market and lower prices. While these measures stabilized the situation domestically, they simultaneously dropped diesel supply on the global market, contributing to the retention of high margins for European and Asian refiners.

Corporate News: Deals and Strategies of Energy Companies

The end of the year has been marked by significant corporate moves in the energy sector, reflecting companies' determination to optimize their asset portfolios and adapt to new market conditions. Major oil and energy corporations are revising strategies, focusing on increasing efficiency in traditional businesses as well as investing in the energy transition and environmentally friendly projects.

• BP announced the sale of 65% of its subsidiary Castrol (a lubricant manufacturer) to the American investment fund Stonepeak for $6 billion. The deal values the entire Castrol business at $10.1 billion; BP will retain 35% of the shares in the new joint venture. The proceeds will be used to reduce debt and pay dividends, aligning with the strategy of enhancing returns in the traditional oil segment.
• Despite sanctions, foreign partners show interest in Russian oil and gas projects. Specifically, Indian ONGC and Japanese SODECO have maintained their stakes in the Sakhalin-1 project, and a preliminary agreement between ExxonMobil and Rosneft about compensating losses from previous years signals the readiness of major players to resume cooperation once the political situation normalizes.
• The convergence of technology and the energy sector continues. In December, American tech giant Alphabet (parent company of Google) announced the acquisition of Intersect Power for $4.7 billion, a company engaged in renewable energy and energy infrastructure projects (including energy supply to data centers). This move will allow Alphabet to accelerate the development of its renewable generation capabilities and reduce the dependency of its data centers on overloaded power grids.