Current News in the Oil, Gas, and Energy Sector for Thursday, December 18, 2025: Oil, Gas, Electricity, Renewable Energy, Coal, Refineries, and Key Events in the Global Energy Market.
Oil and Oil Products
The global oil market remains under pressure: the price of Brent crude is hovering around $60 per barrel, while WTI is trading near $55 per barrel — the lowest levels in recent years. The main factors contributing to the decline in oil prices include:
- Expected supply surplus: For 2026, a surplus in production over demand is forecasted, as non-OPEC countries have ramped up output to record levels.
- Hopes for peace in Ukraine: Progress in negotiations between Russia and Ukraine has fueled expectations of sanctions relief and a return of parts of Russian oil exports to the market.
- OPEC+ Policy: The OPEC+ alliance, after months of gradually increasing production, has decided to pause in Q1 2026, signaling caution amid the risk of oversupply.
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 their lowest values since 2020. The decline in crude prices has already impacted the oil product markets: gasoline and diesel have also become cheaper. In the United States, retail gasoline prices have decreased in most states leading into the holiday season, reducing consumer expenses. European refiners, having switched to alternative oil sources instead of Russian oil, are operating with stable feedstock supply. Global refineries are maintaining high processing levels, benefiting from lower oil prices, although fuel demand is growing at a moderate pace. Refining margins remain stable, and no new shortages of gasoline or diesel are observed in the global market.
Gas Market and LNG
The gas market is experiencing a paradoxical situation: 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, the lowest level since spring 2024. This is nearly 90% lower than the peak values seen during the 2022 crisis and 45% lower than prices at the beginning of 2025. The main reason for this drop is the avalanche of liquefied natural gas imports, particularly from the United States, which compensates for reduced pipeline supplies from Russia. Gas storage facilities in the EU are approximately 75% full, which, although below long-term averages, along with record LNG imports, ensures sufficient resources for stable prices.
- Europe: High volumes of LNG are driving gas prices down, even amidst lower storage levels. In 2025, the US provided over half of Europe's LNG imports, redirecting supplies from Asian markets, leading to a sharp reduction in the spread between European prices and cheaper American gas.
- USA: In North America, gas futures have risen amid forecasts of abnormal cold weather. The Henry Hub price has risen above $5 per MMBtu due to the threat of polar vortex conditions and increased heating demand. However, overall domestic production in the US remains high, keeping price growth in check as weather normalizes.
- Asia: The Asian gas market is relatively balanced towards the end of the year. Demand in key countries (China, South Korea, Japan) has been moderate, allowing additional LNG shipments to be redirected to Europe. Prices at Asian hubs (e.g., JKM) have remained stable without sharp fluctuations, as competition for cargoes between Europe and Asia has weakened compared to 2022.
Thus, the global natural gas market is entering winter with far more confidence than a year ago: stock levels and imports are sufficient to meet needs even during cold periods. The flexibility of the LNG market plays a significant role — tankers swiftly change course to favor Europe, smoothing regional imbalances. If average temperatures are maintained, the pricing situation looks promising for gas consumers.
Coal Sector
The traditional coal segment reached a historic peak in consumption in 2025, but prospects indicate a swift slowdown. According to the International Energy Agency (IEA), global coal consumption in 2025 increased by about 0.5%, reaching a record 8.85 billion tons. Coal remains the largest source of power generation globally; however, its share is expected to decline: the IEA predicts that coal demand will plateau and gradually decrease by 2030 due to the rise of renewable energy and nuclear generation. Regional trends are, however, varied:
- India: Coal consumption has decreased (for only the third time in the last 50 years) due to an unusually strong monsoon season. Abundant rains boosted hydroelectric production and dampened electricity demand from coal-fired plants.
- USA: Conversely, coal usage has risen, aided by higher natural gas prices in the first half of the year and political support for the sector. The new administration in Washington has paused the closure of certain coal power plants, temporarily increasing domestic coal demand for electricity.
- China: The world's largest coal consumer maintained consumption levels from the previous year. China burns 30% more coal than the rest of the world combined; however, a gradual decline 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 the peak year for coal. Increased competition from gas (where feasible) and particularly renewable energy sources will push coal out of the energy mix of many countries. Nevertheless, in the short term, coal remains in demand in developing Asian economies, where growth in energy consumption still outpaces the construction of new clean capacities.
Electricity and Renewable Energy
The electricity sector continues to transform under the influence of climate agendas and fuel price fluctuations. In 2025, the share of renewable energy sources (RES) in global electricity production reached new heights: many countries introduced record capacities in solar and wind power generation. For example, China has actively increased solar generation, while new offshore wind farms and photovoltaic projects have been launched in Europe and the United States, driven by government support and private investment. By the end of the year, global investments in green energy remain high, approaching investments in fossil fuels.
However, the rapid growth of RES poses challenges for ensuring the stability of energy systems. This winter, Europe has experienced the impact of variable weather: periods of weak wind and shorter daylight hours have increased the load on traditional generation. At the start of winter, EU countries had to increase gas and coal production due to low generation from wind farms amid an anticyclone. This temporarily raised electricity prices in certain regions. Nevertheless, due to the increase in RES capacity combined with a high share of gas in the mix, significant supply issues have not arisen. States and energy companies are also investing in energy storage systems and grid modernization to smooth peaks and integrate renewable energy sources.
Climate commitments continue to dictate trends: at the recent global climate summit (COP30) in Brazil, calls were made to accelerate the energy transition. A number of countries agreed on measures to triple the deployment of RES by 2030 and enhance energy efficiency. There is also a resurgence of interest in nuclear energy: new nuclear power plants are being constructed in various regions, and the lifespan of existing ones is being extended to provide baseload generation without emissions. Overall, the electric power sector is moving towards a cleaner and more sustainable future, although the transition period requires a balance between supply reliability and environmental goals.
Geopolitics and Sanctions
Geopolitical factors continue to exert a strong influence on energy markets. The focus remains on the conflict in Eastern Europe and the associated sanctions:
- Peace negotiations: In December, significant progress was made in the dialogue aimed at resolving the situation in Ukraine since the conflict began. The US expressed its readiness to provide Ukraine with security guarantees akin to NATO's, and European diplomats reported constructive negotiations. Expectations of a possible ceasefire have increased, although Russia states that it will not make territorial concessions. The growing hope for cessation of hostilities has sparked discussions about the potential lifting or easing of oil and gas sanctions against Russia in the future.
- Sanction pressure: Simultaneously, Western countries have indicated their readiness to intensify pressure if the peace dialogue hits a dead end. Washington, in particular, has prepared another package of sanctions against the Russian energy sector, which could be implemented if Moscow rejects the proposed terms of the peace agreement. Earlier this fall, the US and UK already imposed additional restrictions on Russian oil giants “Rosneft” and “Lukoil,” complicating their ability to attract investments and technology.
- Infrastructure risks: Hostilities and sabotage continue to pose threats to energy supply. In the past week, Ukrainian forces have intensified drone attacks on oil infrastructure targets deep within Russia. Notably, there have been fires at refineries in Krasnodar Krai and the Volga region due to drone strikes. Although these incidents have only localized effects on the overall fuel supply, they highlight the ongoing military risks to the sector until a lasting peace is achieved.
- Venezuela: In Latin America, geopolitics also play a role in oil markets. After a partial easing of sanctions against Venezuela in the fall, the United States has tightened control over compliance with the terms of the deal again. In December, an incident occurred involving the detention of a tanker carrying Venezuelan oil due to suspected breach of license conditions. The state-owned company PDVSA faced demands from clients for increased discounts and altered supply terms. This complicated Venezuela's export growth, despite the recent permission from the US 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 introduce uncertainty into the global energy sector. Investors are closely monitoring political developments, as any changes — from breakthroughs in peace negotiations to the imposition of new restrictions — can significantly influence the prices of oil, gas, and other commodities.
Corporate News and Projects
The largest oil and gas companies and energy projects worldwide are concluding the year with several significant events and decisions:
- Shell exits German refinery: British-Dutch Shell has renewed its attempts to sell its stake (37.5%) in the Schwedt 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 sanctions risks.
- Middle Eastern expansion: In Kuwait, the oil and gas service company Action Energy (AEC) has successfully conducted an initial public offering on the local exchange and announced plans for regional expansion. The raised funds will be directed towards expanding drilling and field service offerings in Kuwait and neighboring countries, where oil and gas production is increasing. This move reflects the strengthening of Middle Eastern businesses in light of rising oil output in the region.
- New gas deals in Europe: European buyers continue to diversify their gas supplies. Hungary's state-owned concern MVM signed a 5-year contract with American Chevron for the supply of liquefied gas amounting to approximately 2 billion m3 per year. This LNG will be delivered through terminals in Europe, reducing Hungary's dependence on pipeline gas and bolstering the country's energy security. The deal signifies deepening cooperation between the US 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 in Europe), while others are leveraging favorable conditions for growth (as are Middle Eastern players). Simultaneously, investments continue in both traditional oil and gas projects and energy transition initiatives. Industry giants are required to balance short-term profitability with long-term decarbonization trends — a challenge that will shape key strategic decisions in the energy sector as we approach 2026.
