Oil and Gas Sector News for Monday, December 29, 2025. Global Oil and Gas Markets, Electricity, Renewable Energy, 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. The global oil, gas, and electricity markets are stabilizing after a turbulent year: following summer demand crashes, prices have begun to rise moderately. Geopolitical uncertainty persists, but some optimists hope for an easing of sanctions and the restoration of normal exports. Meanwhile, the trend towards increasing production and expanding green energy is intensifying, while coal and gas remain crucial for ensuring energy balance during peak loads.
Global Oil Market: Moderate Growth Amid Oversupply
Brent is trading in the range of $61–63 per barrel, WTI around $57–59, which is 15–20% lower than a year ago. The oil market is showing relative stability after declining demand throughout 2025. Major influencing factors include:
- OPEC+ Policy: OPEC+ countries decided at the end of November to maintain production at the levels of late 2025, rejecting the planned increase in quotas for Q1 2026. This has led to limited price growth while keeping the alliance’s market share below historical highs.
- US Production Growth: Independent oil producers in the US are expanding shale production, reaching a record output of approximately 13 million barrels per day. The oversupply is exerting downward pressure on the price of oil and oil products.
- Global Demand: Oil consumption is growing moderately (according to IEA and OPEC estimates, not more than +0.8–1.0% in 2025), significantly lower than the rates of 2023. Economic growth slowdown and energy-saving measures are limiting the appetites of major consumers, especially in China.
- Geopolitics and Sanctions: Situations in the Middle East (attacks on oil facilities, escalation of conflicts) and Africa occasionally cause price fluctuations, but the global market is responding cautiously. Peace talks in Ukraine have generated optimism regarding the lifting of some sanctions; however, Russian oil continues to be sold at a significant discount (Urals ~$40/barrel, considerably below Brent).
European Gas Market: Record Stocks and Sharp Demand Fluctuations
The European gas market enters winter with unprecedented high stocks in underground gas storage, which has depressed prices to yearly lows (TTF has dipped to ~$330/thousand m3, about €28/MWh). However, the New Year’s frosts have stimulated demand: gas withdrawals from storage have reached record levels, and prices have bounced back to ~$345/thousand m3. Major trends include:
- Declining Russian Imports: EU countries have virtually abandoned Russian pipeline gas – Russia's share in imports has fallen to 10–15%. They are primarily supplied by alternative sources: LNG imports from the US, Africa, and the Middle East have surged, while regasification infrastructure is being utilized (new terminals are being launched in Germany and Spain).
- US-EU LNG Deal: The agreement for energy supplies worth $750 billion in 2026–2028 is progressing slowly. Due to falling prices, the EU has reduced volumes of US LNG purchases (from September to December 2025, supplies to the EU from the US totaled about $29.6 billion, considerably below annual commitments). Low prices have diminished economic incentives.
- Weather Risks: Even with high stocks, gas reacts to extreme cold. New price spikes are possible during prolonged cold spells. Additionally, environmental restrictions on production (emissions) limit gas production capacities in Europe.
- Demand in Asia: China and India are actively importing LNG for winter needs. China is expanding its own production but remains the largest global importer of gas and oil. India is increasing purchases of cheap gas and oil from Russia, bolstering global demand.
Asia: Record Production in China and Growing Imports in India
- China: Domestic oil and gas production is hitting historic records. By the end of 2025, oil output exceeded 4.3 million barrels per day, and gas production reached new heights. Beijing is investing in expanding refineries and power generation capacities to reduce import dependency. Economic slowdown has limited growth in domestic demand, but China remains the world's largest buyer of energy resources.
- India: Despite US pressure and new restrictions, refineries continue to source Russian crude. In December, oil supplies from Russia to India are estimated at over 1.2 million barrels per day (following a record 1.77 million in November) – refineries rushed to secure cheap crude before new sanctions come into force. Talks between Modi and Putin reaffirmed commitment to energy partnership.
- Southeast Asia: Countries in the region continue to build coal-fired power plants to support industry. High demand for affordable electricity is inhibiting a shift away from coal – new power plants are being commissioned in Vietnam, the Philippines, and other countries.
Renewable Energy: Record Capacities and Investments
The trend towards “clean” energy is strengthening: in 2025, the world introduced record renewable energy capacities (~750 GW), and investments in green energy exceeded $2 trillion. New solar and wind power plants account for a significant portion of electricity generation in many countries. At the same time, important features remain:
- Hybrid Systems: Even with the rapid growth of renewables, coal, gas, and nuclear remain essential for the reliability of energy systems. Global energy consumption is still ~80% reliant on fossil fuels. During peak load periods (or during calm weather/night generation), countries are forced to activate gas or coal plants to avoid blackouts.
- Regional Characteristics: Leaders in renewable energy deployment are developed countries and China. The US and EU are introducing subsidy programs for energy storage and localization of renewable energy equipment, but strategic reserves of oil and gas remain in place in case of disruptions. China, meanwhile, is concurrently building hydropower and nuclear plants to balance energy systems while supporting programs to boost hydrocarbon production.
- Electricity Market: Frequent “overproduction” of renewables is leading to lower electricity prices during peak hours (in Europe and China, negative prices occasionally occur). The increase in the share of clean generation is stimulating the development of energy storage infrastructure and network modernization, as well as a carbon quota market to limit emissions. Overall, annual trends confirm a steady transition, but traditional thermal power plants will remain in the grid for a long time.
Coal Market: Stable Demand and Moves Towards “Greening”
Coal still plays an important role in the energy balance. Global coal consumption reached a record ~8.8 billion tons by the end of 2025, up 0.5% from 2024. The primary growth is provided by Asia:
- China and India: These countries continue to actively burn coal for electricity generation and steel production. Although some old mines are closing, new large coal power plants are being commissioned (over 50 GW of new projects in China). India is rapidly expanding coal generation to meet the growing demands of the economy.
- Exporters and Prices: Indonesia, Australia, Russia, and South Africa are maintaining high production and supply volumes. Prices for thermal coal stabilized around $120–140/ton (Newcastle index), below last year’s peaks but ensuring profitability in the sector. Coal stocks at terminals in Asian importing countries are sufficient to prevent sharp price spikes.
- Decline in Developed Countries: In the US and Europe, coal generation is actively being reduced. Environmental restrictions and the rise of renewables have led to double-digit declines in the share of coal in the Western energy balance. However, globally, the trend towards “greening” is offset by increasing demand in developing countries.
Russian Oil Products Market: Government Measures and Prices
In Russia, following the summer price surge for gasoline and diesel, the government has taken measures to stabilize the market:
- Fuel Export Restrictions: The ban on the export of gasoline and diesel has been extended until the end of 2025 for most companies (with the exception of government contracts). This has freed up additional volumes for the domestic market and restrained wholesale price growth.
- Damper System: Since October 1, 2025, the “deviation from the norm” for the damper on gasoline and diesel is temporarily not considered. This has increased subsidies for refiners and reduced wholesale prices. For instance, the exchange price of AI-95 in mid-December was 8–10% lower than the September highs.
- Current Situation: Wholesale fuel prices continue to decrease moderately, and there is no shortage in the market. Fuel stocks and deliveries from refineries ensure stability until January. Authorities consider the situation stable but are ready to introduce new measures if global prices rise.
