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, EU, US, China, and India Roles, Coal Market Trends, Renewable Energy Sources, and Oil Products — Analytical Overview for Investors and Participants in the Global Energy Sector.
Key events in the global fuel and energy sector (TES) as of December 7, 2025, indicate that global markets continue to balance between resource surpluses and geopolitical risks. Oil prices remain at their lowest levels in the past two years: Brent crude is trading at approximately $62–64 per barrel, while US WTI hovers around $59. These levels are significantly lower than mid-year figures, as the market is pressured by increased supply amidst relatively stable demand and cautious optimism regarding potential progress in peace talks related to Ukraine. The European gas market enters winter without signs of shortage: underground gas storages in the EU are still filled to around 75-80%, and wholesale prices (TTF hub) are maintained at approximately €28-30 per MWh, which is an order of magnitude lower than the extreme peaks of previous years. Record LNG supplies and mild weather at the beginning of the season ensure stability and relatively low gas prices.
Meanwhile, geopolitical tensions around the energy markets persist. Western countries continue to tighten sanction pressure on the Russian oil and gas sector: the European Union is legally formalizing a complete ban on imports of Russian pipeline gas by 2027 and is seeking to accelerate the reduction of crude oil purchases from Russia. Diplomatic efforts to achieve a breakthrough in the conflict resolution have not yet yielded tangible results, although the US and Ukraine held consultations in early December on a peace plan. Energy supplies remain at risk due to potential military incidents; however, the global market is currently compensating for local disruptions. Within Russia, authorities are extending emergency measures to stabilize the fuel market following the autumn gasoline and diesel shortages—exports of oil products remain heavily restricted to saturate the domestic market. At the same time, global energy is accelerating its “green” transition: investments in renewable energy are reaching new records, and leading economies are announcing ambitious plans to reduce dependence on fossil resources.
Oil Market: Prices at Two-Year Lows Due to Oil Oversupply and Hopes for Peace
- Global Supply: The world oil market remains oversaturated. OPEC+ countries and other producers are extracting more oil than the market consumes at the current level of demand. Commercial crude stocks in key regions are at high levels, which intensifies downward pressure on prices.
- OPEC+ Decisions: The cartel and its allies are showing caution. At the latest meeting, leading OPEC+ participants agreed to maintain production quotas for the first quarter of 2026 at the December 2025 level, effectively extending current restrictions. If necessary, the coalition is prepared to rapidly adjust production: a reserve capacity of about 1.65 million barrels/day can be gradually returned to the market as conditions require.
- US at Maximum: US oil production is close to record levels. Despite a reduction in the number of active rigs, technological efficiency allowed for a mid-2025 peak (in the continental states, production exceeded 11 million barrels/day). The high production level in the US adds significant volumes to the market, compensating for some of OPEC+ cuts.
- Local Disruptions: Recent incidents have only briefly affected exports. In early December, Ukrainian drones damaged one of the KTK's berths in the Black Sea, through which Kazakh oil is exported; however, shipments quickly resumed via a backup terminal. Additionally, Libya's largest oil terminals were closed temporarily on December 5-6 due to a storm. These events did not trigger a price spike—the market can absorb short-term stoppages, given the current supply-demand balance.
- Price Benchmarks: Brent remains within a narrow range of $62-64 per barrel (more than 20% lower than early autumn levels). Investors expect prices to remain subdued in the near future: there is no clear indication of a strong revival in demand, and the easing of monetary policy in the US only moderately supports commodity markets. At the same time, any new geopolitical shock (escalation of conflict or serious production disruptions) could trigger a short-term price spike.
Gas Market: Europe Enters Winter with Comfortable Stocks and Low Prices
- High Storage Levels: By early December, European gas storages are filled to approximately ¾ (75-80%). Stocks are gradually decreasing with the onset of cold weather, but they still significantly exceed average levels for this period. The created buffer sharply reduces the risk of gas shortages in the height of winter.
- Record LNG Imports: Liquefied natural gas supplies to Europe remain at historically high levels. The weakening demand for LNG in Asia has released additional volumes for the European market, partially compensating for the halt of pipeline supplies from Russia. The US, having increased its LNG exports, has become a key external gas supplier to the EU against the backdrop of rising demand.
- Diversifying 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 maximum capacity, ensuring a stable fuel supply from various parts of the world.
- Low Prices: Wholesale gas prices in the EU are now significantly lower than the peak values of 2022. The Dutch TTF index remains below €30 per MWh (about $330 per 1,000 cubic meters) and continues to decline smoothly for the third consecutive week. Despite seasonal increases in consumption and episodic decreases in renewable energy output, the market remains balanced due to the abundance of supply. So far, new price spikes have been avoided.
Russian Market: Fuel Shortage and Extension of Export Restrictions
- Ban on Gasoline Exports: The Russian government imposed a temporary total ban on the export of automobile gasoline by all producers and traders (except for minimal supplies under intergovernmental agreements) back in late August. Initially, the measure was intended to last until October, but the autumn fuel crisis forced an extension: in practice, the ban remains in effect until the end of the year to maximize the supply of gasoline to the domestic market.
- Restrictions on Diesel: Concurrently, the ban on diesel fuel exports for independent traders has been extended until the end of 2025. Oil companies with their own refineries are permitted limited diesel exports to avoid halting processing due to tank overfill. These steps aim to prevent a recurrence of fuel shortages in the domestic market, which triggered a spike in wholesale prices in the autumn.
- Domestic Stabilization: Thanks to the measures taken, the situation at gas stations has noticeably improved. Prices for gasoline and diesel fuel within the country have retreated from September peaks and stabilized under government control. Long-term regulatory mechanisms are also being considered—adjustments to the damping system, concessionary lending for independent gas stations, changes in tax burdens—to avoid future supply disruptions.
- Production and Redirection of Exports: Russian oil production by the end of 2025 remains around 9.5 million barrels/day, in accordance with OPEC+ quotas. At the same time, oil exports are being redirected from the European vector to the Asian market: buyers from India, China, and other Asian countries are purchasing Russian oil at a discount to world prices. In the gas sector, exports of pipeline gas to Europe have fallen to a minimum; however, supplies to China via the "Power of Siberia" pipeline have reached unprecedented levels, partially compensating for lost markets.
Sanctions and Policy: Increasing Pressure from the West Amid Dialogue Attempts
- Long-term EU Restrictions: Brussels is cementing a legislative withdrawal from Russian energy sources. On December 4, EU institutions agreed on a regulation that imports of Russian pipeline gas must be completely halted by November 1, 2027. Simultaneously, EU countries intend to accelerate the reduction of remaining purchases of Russian oil and oil products, despite potential costs for their refiners.
- G7 Measures: The Group of Seven and allies maintain strict sanctions against the Russian energy sector. A price cap on Russian oil is in place, along with an embargo on many types of oil products. Financial restrictions complicate settlements and insurances for transactions involving Russian oil and gas. While some Asian importers continue to increase purchases from Russia, circumventing the restrictions, the collective West shows no signs of readiness to soften the sanction regime until the conflict is resolved.
- Diplomacy and Negotiations: In the past week, the US and Ukraine held several rounds of consultations regarding a peaceful resolution, developing the framework for a potential agreement. These contacts have generated cautious optimism regarding the prerequisites for the initiation of a peace process. However, Russia is not participating in these negotiations, and hostilities continue without noticeable declines in intensity. There are currently no real grounds for lifting sanctions or easing geopolitical confrontations.
- Market Risks: The situation remains tense. Attacks on energy infrastructure continue within the conflict: strikes on oil terminals, gas facilities, and electrical networks increase uncertainty. Any escalation affecting export routes (for instance, oil transit through 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 confrontation between NATO and Russia, which could trigger a global energy shock.
Asia: India and China Strengthen Energy Security
- India's Position: Under pressure from the West, New Delhi temporarily cut Russian oil purchases in late autumn, but overall, India remains one of Moscow's largest clients. Indian refineries are actively processing affordable Urals oil, covering domestic fuel needs. Excess oil products are exported by Indian companies, including to European markets, effectively bringing Russian barrels to end consumers after refining.
- China's Strategy: Despite economic slowdown, Beijing maintains a key role in the global energy market. Chinese importers are diversifying supply channels: new long-term contracts for LNG purchases have been signed (with Qatar, the US, etc.), and pipeline gas supplies from Russia are increasing (volumes through the "Power of Siberia" pipeline reached record levels this autumn). Simultaneously, China is boosting its strategic oil reserves and stimulating its own production 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 grew, although the pace has somewhat slowed due to last year's high prices and more moderate GDP growth. India is showing stable increases in fuel usage (gasoline, diesel) as its vehicle fleet and industry expand. China focuses on the gasification and electrification of its economy, maintaining high demand for natural gas and electricity. The long-term goal for both countries is to meet energy consumption without undermining environmental objectives, thus accelerating the growth of renewable energy capacities.
Renewable Energy: Record Investments Supported by Governments
- Record Growth: The year 2025 marked another record year for investments in renewable energy sources. According to analysts, global investments in "green" energy exceeded $1 trillion, surpassing investments in fossil fuels. The capacities of renewable energy are growing at unprecedented rates: over the year, more than 300 GW of new solar and wind power plants were commissioned around the world, exceeding last year's figures.
- Climate Policy: At the climate summit COP30 held in November in Brazil, the global community reaffirmed its commitment to accelerating the energy transition. Countries agreed to aim for tripling established renewable energy capacity by 2030 and set a target for annual financing of climate initiatives at $1.3 trillion. Many states and companies announced new goals for reducing emissions and increasing the share of clean energy, backing their words with subsidies and tax incentives.
- New Projects: Large-scale clean energy projects are being implemented everywhere. In Europe, new offshore wind farms have been brought online. Giant solar farms are under construction in China and India, while the first hydrogen hubs powered by solar and wind energy are being launched in the Middle East. The boom in energy storage systems continues: many countries are introducing large battery complexes to smooth out the unevenness of renewable energy generation. Despite economic challenges, investors maintain high interest in the "green" sector, expecting long-term returns from low-carbon projects.
Coal Sector: High Demand Supports 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 thanks to these regions, where coal still dominates electricity generation. Developing economies are not in a hurry to abandon cheap coal, especially against the backdrop of rising energy consumption, using it to ensure the base load of energy systems.
- Signs of a Plateau: Despite high demand volumes, growth in the coal market is slowing down. Analysts note that global coal consumption has likely plateaued and will begin to decrease in the coming years as new capacities of renewable energy and gas-fired power plants are launched. In several countries, a decrease in coal production has already been observed: in the US and Europe, coal-fired power plants continue to be shut down, and in China, plans to build new coal mines and plants are being scaled back in line with announced carbon neutrality goals.
- Prices: Global coal prices have stabilized after a tumultuous surge in 2022. The base index for energy coal (ARA, Europe) hovers around $95-100 per ton, significantly lower than last year's peak values. In Asia, prices have also fallen due to improved logistics and increased supply from major exporters (Australia, Indonesia, Russia). No significant price spikes are forecasted unless there is an extremely cold winter or other force majeure events.
- Pressure from Energy Transition: The coal industry is feeling increasing pressure from environmental restrictions. International banks and funds are increasingly refusing to finance coal projects; investors are demanding strategies for emissions reduction from companies. Even countries heavily reliant on coal are announcing plans to gradually reduce the share of coal generation by the 2030s. All this indicates that the global “coal peak” is near or may have already been passed, and in the long term, the role of coal will gradually decline.
Oil Products and Refineries: Diesel Demand Grows, Gasoline Stagnates
- Distillates on the Rise: Global consumption of distillate fuels—primarily diesel and aviation—continues to increase. Global air travel has almost returned to pre-crisis levels, stimulating demand for jet fuel. Diesel fuel remains the backbone of transportation and industry: expanding logistics, agriculture, and construction in developing countries sustain high diesel demand. Refineries in many regions are increasing the yield of diesel fractions to take advantage of favorable market conditions.
- Gasoline: Consumption of automobile gasoline in developed countries has peaked and is beginning to decline. Improved fuel efficiency, the rise in hybrid and electric vehicle sales, and environmental restrictions in cities are reducing demand for gasoline in Europe and North America. In developing economies (Asia, Africa, Latin America), gasoline use continues to grow alongside increasing automobile ownership. Globally, however, the gasoline market is in a state of 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 oriented towards producing highly demanded products—diesel fuel, jet fuel, and naphtha for petrochemicals. Simultaneously, older capacities suffering from low margins and tightening environmental standards are being phased out in OECD countries. In 2025, global oil refining volume slightly increased compared to the previous year; however, investments are primarily concentrated in regions with growing demand, whereas in Europe and the US, sectoral capitals are shifting towards the production of biofuels and petrochemicals.
Companies and Investments: Industry Consolidation and Project Diversification
- Russian Players: Energy companies in Russia are adapting to sanctions and relying on domestic resources for development. Gazprom Neft plans to issue ruble bonds worth up to 20 billion rubles with a floating rate linked to the Central Bank's key rate to attract financing in closed external capital markets. Rosneft is advancing the mega-project “Vostok Oil” in the Arctic, building infrastructure to exploit giant deposits in Taymyr; by the end of the decade, the project is expected to significantly increase oil production.
- Majors' Strategies: 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 stock buybacks. Consolidation continues: in the US, major deals 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.
- Middle East and New Directions: State companies in the Persian Gulf are actively investing in both traditional oil and gas and new sectors. Saudi Aramco, ADNOC, and QatarEnergy are expanding oil and gas production, building refineries and petrochemical complexes, while simultaneously financing projects in hydrogen, carbon capture, and renewable energy. By doing so, oil exporters are diversifying business models in preparation for the gradual transition of the global economy to low-carbon sources. Overall, global investments in oil and gas exploration and production showed moderate growth in 2025 compared to the lows of recent years, reflecting cautious optimism within the industry regarding future demand for hydrocarbons.
