Energy Sector News – Wednesday, September 24, 2025: Heightened Western Sanctions, Stable Oil and Gas Prices, Energy Strategies of China and India, Renewable Energy Records, High Coal Demand, Continuing Fuel Market Stabilization Measures in Russia. A Comprehensive Overview for Investors and Energy Sector Participants.
The latest developments in the fuel and energy complex (FEC) on September 24, 2025, demonstrate a simultaneous stabilization of key commodity markets amidst escalating geopolitical tensions. Western countries are preparing new restrictions against the Russian energy sector, maintaining a stringent sanctions approach with no visible easing. Meanwhile, the global oil market remains relatively calm: an oversupply and moderate demand are keeping Brent crude prices around the upper $60 per barrel. The European gas market is entering autumn well-prepared, with underground gas storage almost fully filled (over 90% capacity), providing a high level of energy security and maintaining prices at moderate levels. Concurrently, Asia's largest economies – China and India – continue to actively increase purchases of oil, gas, and coal, upholding their energy security strategies in the face of external pressure. The global transition to clean energy is gaining momentum: many countries are witnessing record levels of generation from renewable sources, although traditional fuels are still utilized for the reliability of energy systems. In Russia, following a recent surge in gasoline prices, the authorities are extending and intensifying measures to stabilize the domestic market – from adjusting the damping mechanism to prolonging temporary export restrictions on petroleum products. Below is a detailed overview of key news and trends in the oil, gas, energy, and commodity sectors as of the current date.
Oil Market: Supply-Demand Balance Supports Price Stability
By the end of September, global oil prices are showing restrained dynamics following summer fluctuations. The benchmark Brent is trading around $66–68 per barrel, while American WTI is in the range of $62–64, approximately 10% lower than year-ago levels. The oil market is gradually retreating from the peaks of the 2022–2023 energy crisis and is influenced by a number of fundamental factors:
- OPEC+ Production Increase. The oil alliance continues to methodically increase market supply by gradually lifting previously implemented restrictions. Starting in October, OPEC+ countries are allowed to increase their production by about +140,000 barrels per day (after a gain of approximately +550,000 b/d a month prior). Despite relatively low oil prices, key exporters are eager to reclaim lost market shares. Overall, since spring, production quotas have increased by more than 2.5 million b/d, saturating the global oil market. In mid-September, at the OPEC+ technical committee meeting in Vienna, delegates discussed the methodology for assessing maximum production capacities – this step may precede future quota adjustments. A full ministerial meeting of the alliance is scheduled for October 5, where the issue of maintaining current production increase rates will be addressed.
- Weak Demand and Modest Consumption Growth. Global oil consumption is increasing significantly slower than in previous years. The International Energy Agency (IEA) forecasts that world demand will grow by less than 1 million barrels per day in 2025 (compared to a gain of over 2.5 million b/d in 2023). OPEC also expects moderate consumption growth of about +1.2 million b/d over the year. The reasons include a slowing global economy (especially a decrease in industrial speeds in China) and the effect of high prices from previous years, which have prompted energy conservation. Additionally, high inflation and tight monetary policy in several countries are curtailing economic activity.
- Increase in Stocks Outside OPEC. Commercial oil stocks outside OPEC are rising, signaling a surplus in the market. In the U.S., oil companies are maintaining production close to record levels (approximately 13 million b/d), and an unexpected increase in commercial crude oil inventories was noted in September. Meanwhile, U.S. authorities are reluctant to resume active replenishment of strategic reserves to avoid stimulating price increases. Overall, the growth of production outside OPEC+ (including the U.S., Brazil, Guyana, and other countries) is adding pressure on prices.
- Geopolitical Risks and Finances. The sanctions standoff between Russia and the West continues to create nervousness in the oil market. A certain "risk premium" persists in prices, reflecting concerns over potential supply disruptions due to conflicts or sanctions. At the same time, diplomatic contacts between major powers occasionally provide the market with hope for a de-escalation. However, currently, there are no serious reasons for easing geopolitical tensions, and investors anticipate a prolonged standoff in their forecasts.
Gas Market: Filled Storage Ensures Price Stability in Europe
The focus on the gas market is still primarily in Europe, which is confidently preparing for the winter season. EU countries have rapidly filled underground gas storage facilities throughout the summer, and by the end of September, the average level of storage exceeded 90% of total capacity (equivalent to more than 95 billion cubic meters of reserves). This figure not only significantly exceeds the target of 90% set by the European Commission for early November but also represents a record for this time of year. Thanks to such high reserves and reduced gas consumption compared to pre-crisis years, the European market is entering the autumn-winter period with enhanced resilience.
The nearly full storage facilities have already impacted price dynamics: wholesale gas prices in the EU remain at relatively comfortable levels and significantly below the peak values of 2022. An additional factor is the steady supply of liquefied natural gas (LNG) from the U.S., Qatar, and other countries, which have compensated for the reduction in pipeline gas imports from Russia. As a result, Europe is approaching the heating season in a highly advantageous position: high levels of reserves and diversified supply sources reduce the risk of a repeat gas crisis, while exchange prices fluctuate within a moderate range. However, experts warn that in the event of an extremely cold winter or unforeseen supply disruptions, price pressure may temporarily intensify – although the likelihood of such a scenario is significantly lower than in the past two years.
International Politics: Sanction Standoff with No Signs of De-escalation
The geopolitical situation surrounding the energy sector remains tense. Following some signals during the summer regarding a willingness to engage in dialogue, no significant breakthroughs have occurred. Rather, by the end of September, Western allies are merely intensifying sanctions pressure on Moscow. The United States is considering new restrictions against the Russian fuel and energy complex – including sanctions against major oil and gas exporters, as well as foreign companies aiding in circumventing existing prohibitions. The European Union, having postponed the presentation of the 19th sanctions package last week (originally expected to be announced on September 17), intends to refine measures in collaboration with its G7 partners. According to leaks in the European press, the European Commission may present a new package by the end of September or early October. It is anticipated that this package will target Russian oil and gas companies and banks, as well as, for the first time, third countries: foreign oil refineries (refineries) in India and China that process Russian oil and thereby effectively help circumvent European sanctions could be under threat. At the same time, no new direct bans on Russian oil imports are planned within the EU – a number of states in the bloc (primarily Hungary) are categorically opposed to measures that could undermine their energy security.
Moscow, for its part, is trying to adapt to the realities of sanctions. Russian oil and gas exports are rapidly reorienting from Europe to Asia, the Middle East, and Africa. Supplies of raw materials are increasing primarily to India, China, Turkey, and several other countries – often with significant discounts to global prices to maintain market share. According to Russian officials, despite the sanctions, budget revenues from oil and gas exports remain acceptable due to relatively high raw material prices and a weak ruble. However, the restrictions significantly affect the industry's long-term prospects: Russian companies are still facing limited access to modern technologies and equipment, and foreign investments in new projects are shrinking. This creates risks of slowing technological development in the Russian fuel and energy complex in the future.
An additional factor of uncertainty is the increased threats to energy infrastructure. In September, there was a noticeable uptick in drone attacks targeting Russian fuel and energy complex facilities. On the night of September 18, a major petrochemical plant in Bashkortostan was attacked by drones, and the resulting fire was localized. Days earlier, drone strikes were made on oil refineries in Leningrad and Saratov regions (including the Kirishsky refinery, where equipment damage led to temporary production cuts). Although the air defense system intercepts most drones, the very occurrence of such incidents increases market nervousness and compels authorities to prioritize the protection of energy assets. Overall, the sanctions conflict and associated risks remain key sources of uncertainty for global energy. Markets continue to factor in a prolonged nature of the standoff, and energy companies are taking these threats into account in their planning. Even brief pauses in escalation – such as the postponement of new sanctions or targeted diplomatic agreements – can only temporarily improve sentiment. However, there are currently no serious indications of a de-escalation.
Asia: China and India Increase Imports and Domestic Production
Asian giants continue to play a crucial role in global energy resource markets, compensating for decreasing demand in the West. India and China are simultaneously increasing hydrocarbons purchases and developing domestic production, striving to meet their economic needs and secure themselves against external shocks. Their policies combine a pragmatic approach to supplier selection with large investments in their energy sectors, significantly influencing global flows of oil, gas, and coal. Let's take a closer look:
- India. Despite pressure from the U.S. and Europe, New Delhi has clearly indicated that it does not intend to sharply reduce purchases of Russian energy sources. Russia remains one of the largest oil suppliers to the Indian market, providing a significant share of the country's consumption. According to traders, Indian refineries continue to actively buy Russian Urals oil at a discount of approximately $4–5 to Brent prices, which helps to keep raw material costs down. As a result, India is not only maintaining a high level of imports of Russian oil but is also increasing imports of petroleum products from Russia (for instance, diesel fuel) to meet internal demand. Simultaneously, the government is accelerating programs to reduce import dependence in a strategic perspective: substantial investments are being allocated to develop domestic oil and gas production. In August, Prime Minister Narendra Modi announced the launch of a large-scale program for exploring deepwater fields – the state corporation ONGC has already begun drilling ultra-deep wells in the Andaman Sea, hoping to discover new reserves. These steps aim to gradually enhance India's energy self-sufficiency, although in the coming years the country will still rely on imports for about 80% of its oil and 40% of its gas.
- China. The world's second-largest economy is also increasing energy resource purchases while simultaneously investing in expanding its domestic production. Beijing has not joined sanctions against Moscow and has capitalized on the situation by purchasing Russian oil and gas under favorable conditions. According to official data, in 2024, China imported over 212 million tons of oil and about 246 billion cubic meters of natural gas, surpassing the previous year's figures. In 2025, import growth is continuing, although the pace has slowed somewhat due to high base levels. Concurrently, Chinese oil and gas corporations are breaking production records: during the first eight months of 2025, approximately 145 million tons of oil (+1.5% year-on-year) and about 175 billion cubic meters of gas (+5% year-on-year) have been extracted in China. Domestic production covers only part of the growing demand, so China continues to rely on external supplies for about 70% of its oil and 40% of its gas. Reinforcing long-term energy security, Beijing is expanding cooperation with Moscow. Purchases of pipeline gas through the "Power of Siberia" route have already increased, and key parameters for the future "Power of Siberia – 2" gas pipeline have been agreed upon, which is expected to significantly boost Russian gas exports to China in the years to come. It is noteworthy that for the sake of its interests, China is willing to ignore external constraints: in recent months, Chinese state-owned companies have acquired several batches of liquefied natural gas from the new Arctic LNG-2 project despite U.S. sanctions against it. A separate terminal has been designated in the Beihai port for accepting this fuel which is exclusively used for Russian LNG – this scheme minimizes sanctions risks. Thus, both India and China demonstrate a readiness to secure their growing economies' energy by any means available, despite external pressure.
Energy Transition: Renewable Energy Records and the Role of Traditional Resources
The global transition to low-carbon energy in 2025 is entering a new phase. Various regions across the world are setting record figures for capacity additions and electricity generation from renewable sources – primarily solar and wind. By the end of 2024, total generation from solar and wind power plants in EU countries for the first time exceeded generation from coal and gas-fired power plants. This trend continues into 2025: due to active construction of new solar parks and wind farms, the share of "green" electricity in the EU continues to grow, occasionally surpassing 50% of consumption in certain months. In the United States, renewable energy has also achieved a record share of over 30% in electricity production, with total generation from wind and solar already outpacing that from coal-fired power plants. China, a global leader in installed renewable energy capacity, annually introduces dozens of gigawatts of new solar and wind power plants, constantly setting new records for "green" generation.
Investors and energy companies are increasingly investing in low-carbon projects. According to the IEA, total investments in the global energy sector in 2025 will exceed $3 trillion, over half of which will be directed towards renewable projects, modernization of power grids, and energy storage systems. Traditional oil and gas powers in the Middle East are also beginning to bet on solar and wind power plants, preparing for a gradual decrease in demand for fossil fuels. Simultaneously, the largest oil and gas corporations are diversifying their businesses: creating divisions for "green" hydrogen and biofuels production, and launching carbon capture and storage (CCS) projects. These steps are driven by public and investor demand for decarbonizing the economy and reducing the carbon footprint.
However, the rapid growth of renewable energy share presents new challenges for energy systems. As solar and wind generation increases, variability in generation also intensifies – on windless days and during nighttime hours, backup capacities are required. Many countries are still forced to rely on traditional sources – gas, coal, and nuclear power plants – to balance loads and ensure uninterrupted supply during peak periods. There is active construction of energy storage systems (industrial battery farms, pumped storage stations) and implementation of smart grids, enhancing the flexibility of energy supply. Experts forecast that by 2026–2027, total generation from renewable sources could become the world's largest, ultimately surpassing coal in electricity generation volumes. Nevertheless, in the coming years, traditional resources – natural gas, coal, and nuclear energy – will continue to play a critical role as a "safety net" for energy systems' stability. The current stage of the energy transition is a search for an optimal balance where "green" energy is breaking growth records, but classic hydrocarbons are still necessary for reliable demand coverage.
Coal: High Demand in Asia and Relative Market Equilibrium
Despite the climate agenda, the global coal market in 2025 is operating at historically high levels of consumption. Global coal demand remains close to record levels from 2022–2023, primarily driven by Asian countries. China continues to be the largest producer and consumer of coal: over 4 billion tons are mined annually, which is almost entirely burned in Chinese power plants. During peak demand periods (for instance, during summer heat and widespread use of air conditioning), even these colossal volumes may be insufficient – Beijing increases coal imports to avoid electricity shortages. India generates about 70% of its electricity from coal-fired power plants, and absolute coal consumption continues to grow alongside the country's economic development. Major developing countries in Southeast Asia (Indonesia, Vietnam, Thailand, and others) are also introducing new coal-fired generation capacities to meet rising electricity demand.
Key coal exporters – Indonesia, Australia, Russia, South Africa, and several others – have increased production and supply in recent years, taking advantage of high price periods. Following price peaks in 2021–2022, global energy coal prices have stabilized at moderate levels. For instance, Australian energy coal trades at $130–150 per ton – significantly lower than the extremes of two years ago but still above average values for the previous decade. This price range remains profitable for coal mining companies and acceptable for electricity consumers. Many states have announced plans to gradually reduce coal usage to meet climate commitments; however, in the short term, this resource remains indispensable for reliable energy supply for hundreds of millions of people. Even in Europe, where decarbonization is proclaimed a priority, authorities are compelled to keep some coal-fired plants on standby: for instance, Germany, Poland, and other countries maintain certain coal-fired power plants as a contingency in case of natural gas supply interruptions or insufficient renewable energy output. Thus, the global coal sector is currently in a state of relative equilibrium: demand remains consistently high due to Asia, supply is sufficient, and prices are predictable. In the long term, coal's share in the energy balance will gradually decrease as climate policy strengthens, but in the coming years, coal will retain a significant role, remaining a guarantor of energy security during peak loads and market price shocks for gas.
Russian Fuel Market: Extension of Emergency Stabilization Measures
The internal fuel market in Russia faced a crisis in late summer – early autumn due to a sharp rise in prices for petroleum products. In August, wholesale exchange prices for gasoline and diesel hit historic highs, which soon was reflected in retail price tags. By mid-September, the price of AI-95 gasoline on the St. Petersburg International Commodity Exchange (SPBMC) rose to a record 73 thousand rubles per ton, exceeding even the August peak; diesel fuel also saw sharp increases. This price surge was driven by a combination of factors:
- Seasonal Demand and Agricultural Sector. The summer period traditionally features increased fuel consumption. In 2025, the peak of car travel and large agricultural harvest operations led to increased demand for gasoline and diesel fuel. These seasonal factors were compounded by depletion of stocks among independent fuel traders, which heightened market tension and prompted panic buying.
- Repairs and Emergencies at Refineries. Throughout the summer, several major oil refineries underwent scheduled and unscheduled maintenance, temporarily reducing fuel output. An additional blow came from emergencies: on September 14, an attack by drones on the Kirishsky refinery in the Leningrad region was thwarted – a fire that broke out disabled a key unit (up to 40% of the plant's capacity) for several weeks, reducing gasoline and diesel supply in the market.
- Favorable Export Conditions and Issues with Damping Mechanism. High export prices for petroleum products, particularly for diesel, encouraged oil companies to redirect products abroad at the expense of internal supplies. Simultaneously, the damping mechanism failed: exchange prices for gasoline exceeded the threshold fixed in the tax code (~66.5 thousand rubles/ton for AI-92), leading budget compensation for refineries to effectively zero. In other words, with such high domestic prices, selling fuel for export became more profitable, which exacerbated the shortage in the domestic market.
The Russian government reacted promptly to the fuel crisis, introducing a set of emergency measures. Since late August, a temporary restriction on the export of petroleum products has been in effect: major oil companies have been instructed to refrain from exporting gasoline and diesel until September 30, while the ban has been extended to independent traders until October 31, 2025. Refineries have been ordered to prioritize saturating the domestic market – increasing fuel supplies to problem areas (particularly, additional volumes have been directed to Primorye and Crimea to eliminate local shortages). Simultaneously, the authorities adjusted the damping mechanism: an increase in the permissible deviation of exchange fuel prices from the benchmark indicator that triggers payments to refineries has been agreed upon. Simply put, the government raised the "ceiling" for the damping mechanism – for automotive gasoline from 10% to 20%, and for diesel fuel from 20% to 30%. This will allow refiners to receive budget payments even at higher domestic prices, reducing the incentive to send fuel for export.
The measures taken have already begun to show effects. Following the price peaks of mid-August, wholesale quotes for gasoline and diesel fell approximately 7–8%. However, in the second decade of September, price pressure intensified again: exchange fuel prices began to rise in response to still high demand and persistent temporary factors (not all refineries had completed maintenance, and a mere export restriction proved insufficient for full stabilization). As a result, retail prices for motor fuel have risen by more than 6% since the beginning of the year, significantly outpacing inflation (~4% over the same period). Nevertheless, authorities state that the situation is under control: gas stations are provided with the necessary volumes of gasoline and diesel, with new batches from refineries arriving regularly. It is anticipated that as the agricultural work concludes and all plants return to normal operations, the price growth at gas stations will slow down. The government emphasizes that the resumption of petroleum product exports is only possible after the complete normalization of the domestic market and a stable decrease in exchange prices. If necessary, restrictions are ready to be extended further, utilizing additional resources to keep fuel prices within acceptable limits and prevent shortages of gasoline and diesel in the autumn of 2025.
