Current News in the Oil, Gas, and Energy Sector as of December 1, 2025: Oil Market Trends, Europe's Gas Balance, Renewable Energy Development, Coal Sector Dynamics, and Refinery Prospects. Analysis for Investors and Energy Sector Companies.
The current events in the global energy market are unfolding under the pressures of excess supply and geopolitical uncertainty. Oil prices remain around two-year lows amid weak demand, while European gas reserves are approaching record levels, ensuring tranquility for the heating season. In this context, global investors are actively channeling funds into green energy and network modernization, considering long-term trends towards a shift to clean energy. Below is an overview of key news from the oil, gas, and energy sectors as of December 1, 2025.
Oil Market: Supply and Demand Balance
- OPEC+ Production Growth: Participants of the OPEC+ deal have agreed to a modest quota increase in December (approximately +137,000 barrels/day) while maintaining a halt to further increases in Q1 2026 due to concerns over market saturation. This supports a supply surplus and restrains significant price growth.
- Demand Slowdown: The International Energy Agency reports weak dynamics in global oil consumption. Demand is growing much slower than last year, and coupled with inventory build-up (especially in the U.S.), this exerts downward pressure on prices.
- U.S. Inventories: The level of commercial oil inventories in the U.S. continues to rise (reports from the Department of Energy show an increase last week), while the number of active drilling rigs remains close to historical lows. Meanwhile, U.S. production (13.8 million barrels/day in September) is reaching record levels, raising concerns about excess supply in the market.
- Geopolitical Context: Negotiations between the U.S., Russia, and Ukraine regarding the conflict remain in focus for investors. Statements of readiness for peace have briefly lowered oil prices (in anticipation of sanctions relief), but the lack of guarantees keeps uncertainty intact. Even in the event of a peace agreement, any lifting of restrictions on Russian oil exports will be gradual, so its effect on global prices is unlikely to be immediate.
Gas Market: Stocks and Regional Trends
- Gas Stocks in Europe: As of early December, European underground storage facilities are filled to approximately 75–80% of their total capacity, significantly exceeding average figures from previous years and providing a buffer in cold weather. This situation eliminates panic buying and sharp price spikes for gas.
- Prices and LNG: European gas prices (TTF) remain below €30/MWh—the lowest since the onset of the energy crisis. The U.S. and other suppliers are actively increasing liquefied natural gas (LNG) exports (in 2025, LNG imports to the EU have doubled compared to the same period last year). Meanwhile, Russia continues to redirect gas eastward: supplies to China via the Power of Siberia are increasing, and Gazprom is boosting supplies to Turkey to compensate for the complete cessation of transit through Ukraine.
- Route Changes: Europe continues to diversify its supplies—additional LNG terminals and inter-regional pipelines are being constructed (through North Africa, Azerbaijan, etc.). Russia is seeking new routes and sales mechanisms: land routes to China are being considered, LNG flows from Yamal LNG and Arctic LNG are being ramped up, and new pipelines for southern directions are being discussed.
Electricity and Renewable Energy: Investments and Innovations
- Record Growth of Green Generation: Many countries have set historical records for electricity generation from wind and solar. Major projects for wind and solar facilities have been completed in Europe, the U.S., and China. Investors are channeling record amounts into the expansion of clean energy and the development of energy storage systems (lithium-ion and alternative batteries) to increase grid flexibility with a high share of renewable sources.
- Climate Agenda: At the COP30 climate summit in Brazil, world leaders agreed on annual investments of approximately $148 billion for the modernization of power grids and energy storage, as well as the launch of a global carbon quota trading system. However, the final declaration did not include direct calls for abandoning hydrocarbons, reflecting an attempt to balance the interests of fuel exporters and proponents of the green transition.
- Nuclear Energy: Russia has announced an extensive nuclear power plant development program—by 2042, an additional 38 power units (approximately 30 GW) are planned, which will bring the share of nuclear generation to a quarter of the energy balance. At the same time, China, the U.S., and several European countries are investing in new small modular reactors and exploring innovative nuclear technologies, supporting the role of nuclear power in maintaining grid stability.
Coal Sector: Demand and Prices
- Growth in Asia: China entered the 2025/2026 heating season with record coal generation; in October-November, electricity production from coal-fired plants exceeded last year’s figures by 7–8%. However, restrictions on coal mining in China (as part of anti-inflation measures) are leading to raw material shortages and rising domestic prices: at port terminals, coal prices have surged nearly 40% from this year's lows.
- Europe and the World: Contrary to Asia, Europe and the U.S. are continuing to reduce coal consumption (in favor of gas and renewables). Some countries are systematically closing coal-fired power plants, thereby lowering demand. According to World Bank estimates, global coal demand decreased by about 1% year-on-year in the first half of 2025 due to rapid growth in green generation, although a resurgence in industrial growth could alter this trend.
- Prices and Trade: Limited production from major exporters (Indonesia, Australia) and rising demand in Asia support global coal prices. European traders are reducing purchases, but volatile funds remain in the market: major players are already signing long-term contracts for coal deliveries in 2026, anticipating continued price increases.
Oil Products and Refineries: Domestic Market and Exports
- Tax Incentives Abroad: At the end of November 2025, Russia passed a law granting oil companies the right to reclaim paid excise duties for oil processing at foreign refineries under a tolling scheme. The damping mechanism applies to gasoline and diesel produced from Russian oil at foreign refineries (including Belarusian ones), stimulating processing abroad and increasing exports of oil products to countries in Asia and Europe.
- Market Stabilization: Following an autumn fuel shortage, the government imposed export restrictions on gasoline and diesel and expanded damping instruments. By the end of November, domestic wholesale prices for automotive fuel began to decrease, resolving shortages at gas stations. This stabilizes retail prices and reduces inflationary pressure on the economy.
Russian Oil and Gas Sector: Finances and Infrastructure
- Financial Results: The total net profit of the largest Russian oil and gas companies fell nearly twofold (to about 2 trillion rubles) in the first nine months of 2025, and the number of unprofitable enterprises sharply increased. This is tied to a decline in the average export price of Urals (down to ~$65–70 from $75–80 a year earlier), the strengthening of the ruble, and rising costs (insurance, logistics) under sanctions.
- Gas Segment: Gazprom remains profitable due to high contract prices and market diversification. Despite the complete cessation of transit through Ukraine, the company has ramped up supplies via the Power of Siberia and Turkish Stream. The state supports the industry through modernization programs for gas transport infrastructure and construction of new underground gas storage facilities.
- Oil Segment: Oil production in Russia is close to maximum levels, but revenue is decreasing due to sanctions and market saturation. The launch of new projects is hindered by restrictions (sanctions against Rosneft and Lukoil), so Gazprom Neft and Rosneft are reallocating resources in favor of petrochemicals and exports to eastern markets, while domestic refineries operate at reduced capacity.
Geopolitics and Sanctions: Impact on the Energy Market
- Diplomatic Negotiations: The energy market is sharply reacting to reports on the progress of negotiations regarding Ukraine. While there are no real shifts toward peace, local price reactions are limited to expectations of future changes. Investors understand that any agreement will lead only to a gradual easing of export restrictions, hence fundamental supply and demand factors continue to have the primary influence on quotes.
- International Diversification: Western countries continue to systematically reduce dependence on Russian energy resources. Europe is increasing purchases from the U.S., the Middle East, and other regions, while also expanding green energy programs. The U.S. and its allies are boosting their own oil and gas production to bolster energy security while supporting sanctions against Russian oil and gas projects.
