Current News in the Oil, Gas, and Energy Sector for Wednesday, December 31, 2025: Global Oil and Gas Market, LNG, Renewable Energy, Electricity, Coal, Refineries, and Key Trends for Investors and Energy Sector Participants.
As we approach the end of 2025, the state of the fuel and energy complex is characterized by an oversupply of oil and gas, which keeps prices at minimal levels. For instance, Brent crude oil is trading around $60 per barrel, while retail gasoline prices in the U.S. have dropped below $3 per gallon, reaching levels not seen since 2021. In Europe, underground gas storage is nearly 90% full, keeping prices for "blue fuel" moderate even with the onset of colder weather. Concurrently, the global energy transition is gaining momentum: renewable energy sources (RES) are breaking generation records, and many countries are increasing capacities in wind, solar, and other clean technologies. We present an overview of key news in the raw materials and energy sectors affecting global markets.
Global Oil Market: Oversupply and Stable Prices
The global oil market is entering a new "supply race." Following the conclusions of the autumn sessions, OPEC+ agreed to suspend production increases at the beginning of 2026; however, aggregate supplies remain high. Saudi Aramco has reduced official selling prices for oil in the Asian market several months in a row, reflecting the surplus of crude. U.S. shale producers achieved unprecedented production growth of 25% in 2025, while production in Brazil and Canada also reached record levels. Meanwhile, China has increased its oil purchasing program for 2026, but demand in most major markets remains subdued due to economic slowdown. Collectively, these factors are keeping price increases in check: Brent is hovering around $60–65 per barrel, while WTI is holding steady at around $58–62.
- Oil prices remain relatively stable. Brent is trading around $62, and WTI is around $58–60. This is 10–15% lower than a year ago. The "oversupply" amidst sluggish demand is acting as a restraining factor.
- OPEC+ has decided to pause quota increases for the first half of 2026. The group continues to maintain total production cuts of approximately 3.2 million barrels per day (about 3% of global demand).
- Saudi Aramco has again lowered the selling prices of its oil for Asian buyers for February, reducing the Arab Light premium to a five-year low of approximately $0.40 above the average Oman/Dubai prices.
- Venezuela continues to face challenges. Due to U.S. sanctions, crude oil exports in December fell to about half of November's levels. However, PDVSA is expanding its use of tankers for floating storage and supply of oil to China as part of debt repayment.
- Chevron's new oil and gas project off the coast of Angola produced its first oil in 2025. The company plans to reach an output of about 25,000 barrels per day of oil and 50 million cubic feet per day of gas at the South N’Dola field by the peak of development.
Gas Sector and LNG: Record Supplies and Price Pressure
The year 2025 has been significant for the gas market: new records for LNG (liquefied natural gas) exports have been set. Leading exporters, primarily the U.S. and Canada, have significantly increased shipments. In November, the U.S. exported over 10.9 million tons of LNG—marking the third consecutive record month—primarily due to cold weather on the coast and high utilization rates at Cheniere and Venture Global facilities. For the year, global LNG supplies rose by approximately 4%, surpassing 425 million tons (a significant increase for the first time since 2022), partly due to new terminals coming online in the U.S., Canada, and Qatar. However, competition in the market is intensifying: new export capacities are expected to increase by another 50% by 2030, which could lead to temporary excess gas supplies and declining prices. Europe remains a key market, receiving about 70% of American LNG in November. At the same time, demand in Asia has slowed—Asian JKM prices remain around $11–12 per MMBtu. Due to mild temperatures and ample natural gas supplies, European TTF quotes were around $10 per MMBtu at year-end.
- LNG exports have surged to record levels. The U.S. averaged export volumes of approximately 15 billion cubic feet per day in 2025 (up 25% from 2024), supplying most of the gas to Europe. Canada has also commenced regular LNG shipments from the new LNG Canada terminal for the first time.
- Gas prices are rising moderately. In the U.S., the average Henry Hub price was around $4.5/MMBtu at the end of November (up from $3.4 in October) due to increased liquefaction demand. Europe and Asia are holding above $10/MMBtu but remain below the peak levels of winter 2022–2023. The oversupply from the U.S. smooths out sharp price spikes.
- New infrastructure projects. The U.S. is set to invest more than $50 billion in pipeline construction by 2030 to meet growing domestic and external demand. Several major Asian LNG projects (Qatar, Australia) are slated to come online, and discussions are ongoing regarding the expansion of pipelines from East Africa.
- Regional peculiarities. China received quotas for oil and gas imports, reflecting an 8% increase from the previous year, which supports its demand. India, on the other hand, is seeking to reduce import dependence by developing local gas production and compensating foreign companies for oil delivery shortfalls with gas.
Coal Sector: Record Demand and Long-term Decline
Despite the rapid development of "clean" technologies, global coal demand reached record levels in 2025 due to several factors. According to the IEA, global coal demand increased by about 0.5% to 8.85 billion tons—primarily due to a cold winter and rising consumption in power plants. In China, the largest consumer, coal consumption remained stable overall, although a decline is expected as RES capacities expand. India, for the first time in five years, reduced coal consumption due to substantial rainfall and increased hydropower output. In the U.S., coal consumption rose as high gas prices and government measures (extensions of coal-fired power plant operations) supported demand. However, long-term trends clearly indicate a decline: by 2030, coal's share in the energy balance is set to significantly decrease due to the influence of renewable sources, gas, and nuclear energy.
- Rising consumption. The International Energy Agency estimates that global coal demand reached a new record (8.85 billion tons). The largest increases were seen in CIS countries and the U.S. (largely due to high gas prices), despite declines in India and stagnation in China.
- India and China. In 2025, India reduced both coal imports and consumption due to record precipitation and successful hydropower projects. In China, despite the expansion of RES, coal still constitutes over 50% of generation; however, Beijing plans a gradual reduction in coal's share by 2030 as RES and nuclear energy gains ground.
- Long-term trends. IEA experts point out that due to decarbonization policies and economic factors, coal demand has reached a plateau and is expected to gradually decline in the second half of the decade. Previously announced environmental targets are encouraging the transition of thermal power plants to gas and the installation of additional solar and wind facilities.
Electricity and RES: Record Growth of Renewables and New Challenges
In 2025–2026, a historic turning point has emerged: the cumulative electricity generation from RES has first surpassed coal's share in the global energy balance. The increase in electricity consumption of 2-3% in 2025 was entirely driven by growth in wind and solar generation capacities (over 30% and 8% respectively), while coal generation declined. The global share of RES in generation exceeded 34%, while coal reduced to around 33%. Hydropower and nuclear energy capacities are also increasing: it is expected that by the end of 2026, overall nuclear generation will hit record levels (mainly due to new reactors in China, India, and Korea). According to the IEA report, by 2030 approximately 80% of the new renewable capacity increase will be from solar energy, necessitating extraordinary investments in networks and storage to smooth variability. Many countries have already announced large-scale projects: for example, Indonesia plans to increase its installed RES capacity by 30% over the next five years, while the EU is expanding funding for electricity grids and data centers powered by RES.
- New RES records. According to industry agencies, in just the first half of 2025, solar and wind installations contributed over 300 TWh to global generation. This roughly corresponds to the annual electricity consumption of a country like Italy. The transition to RES eases the pace of demand growth but requires network upgrades.
- Investments in grid and flexibility. The increased share of RES poses balancing challenges for the energy sector: energy storage (batteries, hydrogen), robust networks, and controllable generators are needed. International institutions are urging governments to accelerate the construction of "smart grids" and substations, as well as implement demand management systems.
- Hydro and nuclear. While RES lead, hydropower remains an important reserve—especially in Asia. Nuclear generation is also gaining traction: in 2025–2026, new reactors will come online in China, India, and the UAE, contributing to a reduced dependence on coal in the region.
International Geopolitics: Conflicts and Sanctions
Global political events remain a significant driver for energy prices. The escalated conflict in Yemen (involving the UAE and Saudi Arabia) has created uncertainty: threats of disruptions to supplies through the Red Sea trigger support for risk premiums. Simultaneously, negotiations to conclude the war in Ukraine have made little progress, and the revision of stances by Russian leadership in December has fueled concerns regarding future gas flows. Against this backdrop, oil prices remain above August levels despite "overproduction" in the market. Sanctions also play an important role: the U.S. has continued to blockade Venezuelan oil supplies, reducing PDVSA's exports by approximately half in December. Nevertheless, some sanctioned tankers are heading toward Venezuela's shores as Maduro repays debts to China in oil. Additionally, Russia has extended its ban on the export of gasoline and diesel until February 2026 due to energy deficit risks.
- Conflict in Yemen. After tense skirmishes in December, the UAE announced troop withdrawals, but the situation remains tense. The military crisis adds fears to oil markets, as it potentially threatens major supply routes through the Red Sea.
- Russia-Ukraine. Negotiations to cease hostilities have stalled: Russia claims to be "revising" its approach, while Ukrainian leadership refuses to make concessions. This maintains risks for gas supplies (through Gazprom) and oil (considering possible shifts in sanctions).
- Venezuela blockade. The U.S. has intensified pressure on Venezuelan oil exports: a tanker blockade has been introduced. PDVSA's exports fell by about 50% in December. However, some oil continues to be sent to China under barter schemes. Maduro is negotiating with consumer countries, offering significant discounts to avoid a complete halt in sales.
- Middle East and Iran. Tensions surrounding Iran's nuclear program remain a factor in volatility. Informal signals regarding the resumption of Iranian gas and oil exports could impact supply balances in the region by mid-2026.
Refining and Oil Products: Margins and New Trends
The growing global surplus of crude oil does not automatically translate into cheaper fuel products. Diesel prices remain high due to structural supply constraints: European refineries are reducing processing of Russian oil under sanction pressures, and drone strikes on Russian oil fields are exacerbating diesel shortages. Consequently, margins on the European diesel fuel market rose by approximately 30% in 2025, despite falling crude prices. In the U.S., gasoline typically decreases in price during the Christmas period: at the beginning of December, retail prices dropped to levels seen in 2021 (around $2.9/gallon). In Asia, large fuel importers are confirming moderate consumption growth. In response, European refiners are pivoting towards the production of biofuels and sustainable aviation fuels (SAF) to diversify their operations. Several countries are also discussing the introduction of new fuel environmental component standards, stimulating refinery modernization.
- Rising diesel margins. Due to decreased exports from Russia and limited replenishment of stocks in Europe, diesel prices in November–December outstripped those of crude oil. Demand for diesel is expected to remain high in 2026 (construction, agriculture), supporting margins at average levels of $10–15/barrel.
- Euro depreciation. As fuel prices decline in Asian markets, European traders anticipate falling gasoline and aviation fuel prices. According to agencies, in December, gasoline futures in Amsterdam dropped below November levels by 15%. This offers consumers a short-term reprieve.
- Transition to SAF and biofuels. Under pressure from the EU and the U.S., refiners are beginning to construct facilities for producing biodiesel and SAF. Aviation industry subsidy programs are promoting demand growth: for example, in Europe, total SAF production is projected to reach 3 million tons by 2026.
- Stabilizing the domestic fuel market. Emergency measures have been adopted in several countries. In Russia, where gasoline prices surged in the first half of the year, the export ban on fuel has been extended. Conversely, in the U.S., drilling activity has increased—companies are ramping up the number of wells to take advantage of low oil prices.
Major Projects and Investments: Deals and Future Ambitions
Despite short-term challenges, oil and gas companies are preparing for long-term growth. Several landmark agreements were concluded in 2025. Woodside Energy signed a long-term contract for approximately 5.8 billion cubic meters of LNG from new American projects (Louisiana) with shipments starting in 2030. International oil companies continue to implement large-scale developments: for instance, Saudi Aramco and the UAE plan to increase investments in traditional oil production in 2026–2030 after a pause. In the Asian direction, Shell and partners in Canada are facing challenges in launching the LNG Canada plant: both lines were idle for several weeks in December due to technical issues. The Sakhalin-1 field in Russia remains in focus: the government has extended the timeline for the sale of a 30% stake in ExxonMobil until the end of 2026, providing an opportunity for the integration of a foreign company after the sanctions end.
- Significant LNG deals. In the U.S., a number of 10–15 year contracts for LNG supplies to Asia and Europe have been announced. Apart from Woodside, similar deals involve Kazakh Tengiz (field expansion project) and Russian projects (Lakhda LNG, Arctic LNG).
- New oil and gas projects. Chevron began production at a field off the coast of Angola (with the first oil appearing in the summer of 2025), while Italy's Eni is considering similar actions in Mozambique and Nigeria. Development ministries in BRICS countries announced plans to increase oil production at depleted fields using Enhanced Oil Recovery technologies.
- Investments in RES. Among the strategies of major companies is diversification. For instance, Swedish Vattenfall is seeking government funding for constructing new nuclear reactors as part of its "green" strategy; Chinese CATL is investing in European battery manufacturing plants. The number of joint ventures in renewable energy is rising in Asia.
- Preparation for 2026. Many research organizations and financial players expect that oil and gas reserves will continue to grow in 2026, prompting the need for a throttle. Experts predict a possible reduction in capital investments by Western companies of 10–15% at the end of 2026—yet with a focus on new technologies (E&P in Arctic, deepwater) and digitalization of production.
