Current Energy Sector News for Friday, September 26, 2025: Oil Price Rise, Gas Situation in Europe, Fuel Shortages in Russia, Sanctions, Renewable Energy Sources, and Corporate Transactions. Analysis of Global Trends for Investors and Energy Market Participants.
Energy markets are displaying mixed dynamics: oil has reached local peaks against a backdrop of geopolitical risks, Europe is confidently preparing for winter with high gas reserves, while Russia is grappling with fuel shortages and limiting exports. Meanwhile, the global energy sector continues its shift towards a "green" transition—with investments in renewable energy sources hitting record levels, and major companies revising strategies and demand forecasts.
Oil Market: Prices at Peaks Due to Limited Supply
Global oil prices at the end of September are holding at elevated levels. Mid-week, Brent quotes climbed to a seven-week high (~$69 per barrel), while WTI reached ~$65, which is 2-3% higher than the beginning of the month. The price increase is due to several factors:
- Unexpected decline in U.S. oil inventories: According to the Energy Information Administration (EIA), commercial inventories dropped by approximately 0.6 million barrels over the week, contrary to analysts' expectations for a rise. This signal of limited supply supported the market.
- Geopolitical risks in Eastern Europe: Ukraine has intensified drone strikes on Russian oil infrastructure. Oil pumping stations in the Volgograd region have been damaged, and a state of emergency has been declared at the port of Novorossiysk. These events heightened concerns over potential disruptions in the supply of Russian crude.
- Sanction-related uncertainty: Western countries are discussing the possibility of new sanctions against the Russian energy sector. Specifically, the U.S. administration has urged the EU to expedite its abandonment of Russian oil and gas. The market is factoring in the risk of tightened restrictions, further pushing prices upward.
- Return of some supply: A restraining factor on prices emerged from reports of an agreement in Iraq to resume oil exports from the Kurdistan region (after nearly six months of suspension). Furthermore, after the peak summer transport and holiday season, fuel demand is seasonally declining towards autumn.
In the latter half of the week, a slight correction emerged in the oil market: some investors took profits after the rally, and Brent retreated below $69 (by ~0.5%). Nevertheless, prices remain close to recent peaks. The market balance is fragile—with participants wary of supply shortages, while also anticipating increased supply in the fourth quarter due to a gradual rise in OPEC+ production and the return of Kurdish oil.
Gas Market: Europe Prepared for Winter with Reserves and LNG Supplies
The natural gas market remains more stable. European countries have accumulated significant gas reserves ahead of the heating season: underground storage facilities in the EU are, on average, filled close to the target level of 90%. This indicates that Europe is entering winter with a solid buffer in case of cold weather or supply disruptions.
- Thanks to a mild summer and conservation measures, Europe was able to inject gas without the previous urgency. According to Gas Infrastructure Europe, by the end of September, the total storage level exceeds last year's figures for the same date.
- LNG imports remain high. Weak demand for liquefied gas in Asia has freed up additional volumes for Europe. This has helped compensate for reduced pipeline supplies from Russia, as well as scheduled maintenance on several North Sea fields.
- Wholesale gas prices in the EU (TTF index) are holding within the range of €30-35/MWh, significantly below the peak values of 2022. A balanced market and high reserves reduce the likelihood of sharp price spikes this winter.
High reserves and diversification of sources—from Norwegian pipeline gas to LNG from the U.S. and the Middle East—strengthen Europe's energy security. Although risks remain in the Mediterranean (particularly transmission instability through the Suez Canal due to conflict in Yemen and limited supplies from Libya), the European gas market in 2025 is significantly calmer than it was two years ago. This allows European countries to simultaneously reduce dependence on Russian gas and keep electricity tariffs for industry and households at manageable levels.
Russian Market: Fuel Shortages and Export Restrictions
In Russia, the situation in the fuel market has worsened this autumn. A number of regions are experiencing shortages of automotive fuel—primarily gasoline and diesel. The main reasons are a combination of seasonal demand increases (the harvest season is raising fuel consumption among agricultural producers) and reduced supply from oil refineries. The latter is linked to emergency shutdowns at some refineries due to increased drone attacks from Ukraine.
Ukrainian strikes on oil refineries in southern Russia have led to reduced production of certain fuel grades. As a result, a market imbalance has emerged domestically: wholesale prices have risen on the exchange, and some gas stations are experiencing gasoline shortages. To stabilize the situation, the Russian government has enacted urgent measures to restrict fuel exports:
- Ban on gasoline exports—initially implemented at the end of August as a temporary measure, now extended at least until the end of 2025. It applies to all gasoline producers and intermediaries (traders), except for supplies under intergovernmental agreements.
- Partial ban on diesel fuel exports—to be enacted until the end of the year for independent fuel sellers (those who purchase fuel from producers for resale abroad). Oil companies directly producing diesel are excluded from this measure to maintain their incentives to keep high processing levels.
According to Deputy Prime Minister Alexander Novak, the resulting deficit is localized and can be compensated by releasing reserve volumes of petroleum products to the domestic market. Authorities hope that export restrictions will saturate the domestic market, curb rising prices at gas stations, and ensure priority supply to agricultural producers and other consumers. As Russia is one of the largest diesel suppliers in the world, a reduction in its exports has already affected global prices: diesel futures in Europe have slightly increased on expectations of lower supply. Nevertheless, for Moscow, internal stability is currently a priority: preventing a fuel crisis ahead of winter has become the government's strategic objective.
Sanctions and International Cooperation: Uncertainty Remains
Geopolitical factors continue to exert strong influence over the energy sector. Western countries maintain a tough stance regarding the Russian energy sector. The U.S. has intensified pressure: President Donald Trump publicly urged European countries to accelerate the abandonment of Russian oil and gas in order to reduce Moscow's revenues and expedite the conclusion of the conflict. The EU, for its part, is gradually closing remaining loopholes: additional restrictions are being introduced, for instance, on the re-export of petroleum products to third countries.
At the same time, diplomatic efforts are being made to resolve the situation in Ukraine. A meeting of U.S. and Russian leaders took place in mid-August, where pathways to achieve a peace agreement were discussed. However, no tangible progress was made as hostilities continue, and hopes for a quick easing of sanctions are not yet realized. Sanctions against Russia's energy sector remain in place, hindering the normalization of oil and gas trade flows.
Despite this, major businesses are preparing for potential improvement in relations in the future. American ExxonMobil, for example, has signed a preliminary agreement with Rosneft outlining a framework for potential compensation of approximately $4.6 billion in losses that Exxon incurred after exiting Russian projects in 2022. According to sources, this agreement is currently non-binding and will only take effect if sanctions are eased and progress is made in peace negotiations. Nevertheless, the fact of such dialogue is significant: it indicates that some international investors are counting on partial restoration of cooperation with Russia in the long term. Previously, significant asset write-downs in Russia were made by BP and Shell, and they, along with Exxon, will be interested in regaining lost profits if the political situation improves.
In the short term, however, the sanctions standoff continues to constrain the sector. Russian oil and petroleum product exports remain at reduced levels due to embargoes and price ceilings, while Western companies cautiously evaluate any projects related to Russia. Investors in the CIS region are closely monitoring these developments, recognizing that political decisions can dramatically alter the configuration of energy markets.
Electricity and Coal: Balancing Reliability and Ecology
In the power sector, European countries are seeking a compromise between the reliability of energy systems and decarbonization goals. Italy serves as an example: Energy Minister Gilberto Pichetto Fratin stated that the country will not be able to completely phase out coal generation by the end of 2025, despite previous plans. The Italian authorities have postponed the shutdown of the last coal-fired power plants (in Civitavecchia and Brindisi), citing the need to ensure reserve capacity in conditions of geopolitical uncertainty.
This decision to extend the operation of coal plants is related to the current situation: a war is ongoing in Europe, and instability persists in the Middle East, creating risks for resource supply. Notably, disruptions in shipping through the Suez Canal are occurring due to the actions of Yemeni rebels, alongside reduced gas exports from Libya due to internal instability. In these conditions, the Italian government decided to take precautions and temporarily maintain coal generation to avoid possible electricity shortages.
This step reflects a broader trend: energy security concerns are being prioritized, even if this necessitates temporarily slowing down environmental plans. Nonetheless, the overarching European trend remains unchanged—the share of coal in electricity production is steadily declining, yielding place to gas and renewable sources. According to the European Commission, CO2 emissions in the EU power sector in 2025 decreased compared to the pre-crisis 2019 levels, despite a temporary increase in coal usage in some countries. Stabilization in gas prices and a rise in renewable energy generation are helping energy producers maintain a balance between reliability and ecological soundness: electricity wholesale prices in Europe are expected to remain significantly lower than the peaks of 2022, benefiting both consumers and energy companies.
Renewable Energy: Record Investments
The global transition to clean energy is gaining momentum. The year 2025 could become record-breaking in terms of investments in renewable energy. According to estimates from the International Energy Agency, global investments in clean energy surpassed $1.9–2 trillion in 2024, more than double spending in the oil and gas sector. Capital is increasingly flowing into solar and wind generation, as well as supporting infrastructure (grids, energy storage systems).
During September's Climate Week in New York, leaders from governments and major energy companies reaffirmed their goal to double, if not triple, the installation of new renewable capacity by 2030. To achieve this, they propose accelerating permitting processes for wind farms and solar plants, along with expanding support measures—from “green” tariffs to government guarantees for investments. Particular attention is being given to attracting funding to developing countries, which currently receive less than 10% of “green” investments, despite accounting for a third of global GDP and representing the main growth in energy demand.
The rapid growth of renewable energy is already reshaping the structure of the global energy sector. In several countries, the share of renewable energy in electricity production is consistently breaking records. Concurrently, the cost of technologies is declining: the cost of producing 1 kWh of solar or wind energy has decreased by tens of percent over the past decade. All this reinforces the trend: clean energy is perceived not only as a means to combat climate change but also as a factor in ensuring energy independence and lowering economic costs. However, for further large-scale growth in renewable energy, issues related to energy storage, grid modernization, and system balancing during periods with limited sunlight and wind need to be addressed.
Long-term Forecasts: Demand for Oil, Gas, and Coal
The energy transition and geopolitical shifts are prompting analysts to reassess long-term forecasts for energy resource demand. Specifically, BP, in its new Energy Outlook 2025 report, has revised its expectation for the peak in oil consumption. Whereas a year ago, BP believed that global oil demand would peak (~102 million barrels per day) by 2025, it now anticipates continued growth until 2030. According to the revised scenario, oil consumption is expected to rise to ~103–104 million barrels/day by the end of the decade, driven by growth in aviation, petrochemicals, and ongoing economic growth in Asia, after which a lengthy plateau and gradual decline is anticipated into the 2040s.
Other important trends highlighted in BP and IEA forecasts include:
- Renewable Sources vs. Coal: By 2040, renewable energy (solar and wind power) will surpass coal in its share of the global energy balance. This reflects the rapid growth of clean technologies and the policies of many countries aimed at phasing out coal generation.
- Natural Gas Demand: Global gas consumption is projected to increase by nearly 20% by 2040 compared to current levels. This growth will primarily occur in Asia (China, India, other developing markets), where gas is seen as a more environmentally friendly alternative to coal. However, after 2030, the growth rate of gas demand is expected to slow down due to strengthened climate policies and competition from hydrogen and renewable sources.
- Coal Sector Outlook: Global coal demand is nearing its peak and is expected to begin declining in the next 10-15 years. In certain regions (Europe, North America), the decline of coal usage is already underway, while in some Asian countries, peak coal consumption may occur in the mid-2020s, followed by a subsequent decline. A long-term risk for the coal industry is tightening environmental regulations and competition from cheaper renewable energy sources and gas.
Overall, the consensus suggests that the 2020s will be a watershed decade: oil consumption growth will slow and eventually halt, gas will remain significant as a "transitional" fuel, and renewable sources will continue to capture an increasing share of electricity production. Energy companies and investors will need to adapt to these changes—diversifying assets, investing in new technologies (from hydrogen energy to electricity storage), and factoring in the strengthening climate agenda when planning projects for decades to come.
Corporate News: Deals and Company Strategies
In the corporate segment of the energy sector, portfolio restructuring and the fight for promising assets continue. This week, it was reported that American Chevron expects a one-time loss of $200-400 million for the third quarter of 2025, related to the completion of its acquisition of Hess. The $55 billion deal was finalized in July, giving Chevron control over large oil fields in Guyana (one of the largest oil discoveries in decades), for which it competed with ExxonMobil.
The integration of Hess is accompanied by significant one-time expenses—from severance payments for laid-off employees to the revaluation of certain assets. Excluding these write-downs, the negative impact on Chevron's adjusted earnings is estimated to be less ($50-150 million) for the quarter, indicating high profitability of its core business. Additionally, Chevron reported an increase in total production: in Q3 2025, the company expects to produce 450,000–500,000 barrels of oil equivalent per day, thanks to contributions from new assets.
Chevron's example illustrates that even in an era of energy transition, oil and gas giants continue to expand their resource base. Significant mergers and acquisitions in the sector are motivated by the desire to secure future production and market share. Earlier in 2023-2024, a series of transactions occurred: ExxonMobil acquired shale producer Pioneer Natural Resources, Shell expanded its presence in LNG, and various European companies invested in renewable energy. This trend reflects a dual strategy within the industry: on one hand, maximizing returns from traditional oil and gas in the coming years, and on the other, preparing for a low-carbon future.
Investors are closely monitoring the financial outcomes of such significant deals. In Chevron's case, the markets reacted calmly—one-time losses are considered an acceptable price for access to promising reserves. The company's stock remained stable, and analysts noted substantial production potential in the Guyanese blocks. At the same time, leadership at oil companies faces the challenge of convincing shareholders that investments in long-term projects will pay off, even in light of a potential peak in oil demand in the next decade and tightening environmental regulations.
Thus, a balance can be observed in the investment strategies of energy companies: revenues from current operations (oil, gas, petroleum products) are directed both towards shareholder returns and the acquisition of assets and technologies for future growth. The fuel and energy sector is undergoing transformation under the influence of external challenges but continues to offer growth opportunities for players that can adapt to new market and regulatory realities.
