Oil & Gas and Energy News, Tuesday, December 2, 2025 — Ukraine Negotiations, Markets, and COP30 Outcomes

Current News in the Oil, Gas, and Energy Sector as of December 2, 2025: Market Situation for Oil and Gas, Renewable Energy Updates, Geopolitics, Investments, and Key Events in the Global Energy Sector.

Oil Market

• OPEC+ maintained its current production levels during its November meeting for Q4 2025 and Q1 2026. This decision means the continuation of existing cuts (approximately 3.2 million barrels/day) in light of anticipated demand slowdowns.
• The U.S. is producing a record amount of oil (~13.8 million b/d), while commercial oil inventories continue to rise. Increasing domestic supplies in the U.S. and other countries are dampening further increases in global fuel prices.
• Incident in Novorossiysk: Ukrainian drones damaged one of the Caspian Pipeline Consortium's (CPC) docks, reducing oil supplies to the port. This incident temporarily decreased CPC's export volume (around 1% of global exports), leading to short-term price fluctuations.
• Geopolitics: Negotiations regarding Ukraine remain a key factor. The prospect of a peaceful resolution could ease sanctions against Russia and increase oil and gas supplies. Simultaneously, the risk of new restrictions and asset reshuffling keeps the industry in a state of uncertainty.

Gas Market

• European reserves: By the start of the 2025/26 heating season, EU gas storage facilities are filled to approximately 75-80% of capacity, which is significantly above average levels. This reduces the risk of gas shortages and maintains low prices (TTF ~€30/MWh).
• LNG imports: Europe is actively increasing its imports of liquefied natural gas. The launch of new terminals in the U.S. and Australia, combined with waning demand from Asia, has provided additional LNG volumes for the EU. LNG flows into Europe saw significant growth in 2025, aiding in supply diversification.
• Russian supplies: Russia is shifting its focus to Asian markets. Exports through the "Power of Siberia" pipeline to China are increasing, with the "Power of Siberia-2" project expected in 2026. Gazprom is negotiating the extension of contracts with Turkey, maintaining exports via the "Turkish Stream." Traditional routes to Europe are still functioning at reduced capacities.
• Domestic demand: Gas consumption in Germany has significantly increased due to reduced wind and hydroelectric power generation. This is slowing storage fill rates and creating localized price pressures in the region, although the European system is overall securing needed imports.

Electricity and Renewables

• Record growth in renewables: Renewable energy sources are adding capacity at unprecedented rates. Solar and wind generation in many countries have outpaced electricity demand growth, which for the first time has stabilized global CO₂ emission levels. China and the U.S. remain leaders in increasing "clean" energy, while Europe is gradually adjusting its support programs.
• Infrastructure investments: Following COP30, global energy companies and governments announced plans for substantial funding for grid modernization and energy storage. Energy giants alone promised to invest around $148 billion annually in new transmission lines and storage systems, enhancing the integration of variable energy sources.
• EU policy: Brussels continues its pursuit of energy independence. New measures under the REPowerEU plan include a phased ban on Russian gas and oil imports by 2027, extended requirements for filling gas storage by the end of 2027, and increased funding for energy efficiency and clean energy projects. Accelerated construction of new renewable energy projects and networks is being discussed.
• Nuclear program: Despite the focus on "green" energy, countries are not abandoning nuclear energy. A recently published EU report indicates that investments in nuclear power plants (extending operational lifetimes and building new ones) will require about €241 billion by 2050. Simultaneously, plans for small modular reactors (SMRs) and hydrogen technologies are being developed as "bridges" to a carbon-free economy.

Coal Sector

• Long-term contracts in Asia: Many Asia-Pacific countries are still compelled to maintain high coal consumption. Agreements made years ago guarantee the operation of coal-fired power plants for decades, regardless of the availability of wind or solar energy. Experts estimate that coal still provides a significant share of generation in Southeast Asia, although the global share of coal is gradually decreasing.
• Global trends: Despite this, several major economies have announced phased coal phase-outs. The Chinese market is showing early signs of emission reductions due to record renewable energy input: in 2025, coal emissions fell for the first time. South Korea, India, and several European countries have announced new targets for reducing the share of coal power generation and increasing the role of "clean" energy.
• Climate commitments: The final document of COP30 saw no direct mention of "coal" (under pressure from exporting countries), but individual countries announced their measures. For instance, South Korea will halt construction of new coal-fired power plants and gradually close existing facilities. Additionally, an international methane reduction fund was launched at the summit (with a £25 million contribution), signaling a shift towards cleaner energy sources.

Refined Products and Refineries

• Demand changes: The demand for refined products is unevenly shifting. Diesel and jet fuel are recovering faster due to increased freight transport and the resumption of air travel, while gasoline demand is recovering more slowly. This demand reorientation is prompting refineries to adapt their production (increasing the share of diesel and jet fuel).
• Refining: Refineries in Asia and the Middle East are operating at nearly full capacity due to high crude supply. This boosts confidence in refined product exports but constrains margins due to an oversupply of crude. In Europe, some refineries have shifted to processing oil grades not subject to sanctions, yet overall refinery utilization remains high.
• Sanctions: Restrictions on Russian refined products continue to impact the balance. The EU and the U.S. have imposed a ban on the import of diesel and kerosene from Russia, forcing some refineries to seek alternative supplies. These measures are keeping prices in check amid an oversupply of crude, but simultaneously prompting companies to accelerate the development of alternative fuels and comprehensive utilization of by-products.

Companies and Investments

• Exploration and projects: Europe is gradually relaxing drilling restrictions. In Greece, a license for offshore gas fields was issued for the first time in 40 years to Exxon/Energean, while in Italy and the UK, companies Shell and Chevron have received or are awaiting permits to expand existing fields. These steps reflect a new approach to domestic resource exploration.
• M&A activity: Activity in this segment is high. For example, Targa Resources acquired gas transportation assets in the Permian Basin for $1.25 billion, strengthening its pipeline network in the U.S. Oil traders (e.g., Gunvor and Vitol) are considering investing in U.S. shale projects to diversify their portfolios and secure long-term fuel supplies.
• LNG projects: Investors are reassessing long-term investments. The UK government declined to finance $1.15 billion for an LNG project in Mozambique due to security risks and changing global agendas. TotalEnergies is preparing to resume work on this project, but timelines and financing volumes are subject to review.

Geopolitics and Regulation

• Sanctions and agreements: Negotiations regarding Ukraine continue to set the market tone. While no specific agreement is in place, discussions have included plans for further tightening sanctions against Russia after 2025. The EU has already extended mandatory gas storage filling norms until the end of 2027 and announced new incentives for "green" projects, aiming to ensure energy independence.
• International cooperation: G20 countries and COP30 participants have agreed to increase financing for climate programs. Estimated needs for assistance to developing countries to achieve climate goals by 2030 reach $2.4 trillion annually. China and India have confirmed their readiness to play a key role in expanding renewable energy, while developed countries pledged additional investments in clean technologies.
• Regional initiatives: At the union level, new organizations are being formed. The EU has created a Platform for Energy and Raw Materials for the joint procurement of critical resources (hydrogen, natural gas, etc.). In Asia, cooperation is increasing to create regional gas markets and develop "green" funds. Many countries are developing national decarbonization roadmaps, introducing tax and subsidy incentives for transitioning to clean energy.
• Technological standards: Simultaneously, emission regulations are being improved. The U.S. is tightening methane emission standards at oil and gas fields, while the EU is promoting clean energy support mechanisms through carbon pricing and quotas. These measures aim to accelerate the transition to a "green" course and influence the investment strategies of companies worldwide.