Key News in the Oil, Gas, and Energy Sector for Sunday, December 21, 2025: Oil and Gas Market, Energy, Renewables, Coal, Oil Products, and Global Trends in the Energy Sector.
Current events in the fuel and energy complex (FEC) on December 21, 2025, are attracting the attention of investors and market participants due to their contradictory signals. On the diplomatic front, there have been noticeable shifts: negotiations involving the US, EU, and Ukraine took place in Berlin, instilling cautious optimism regarding a possible end to the protracted conflict – Washington offered Kyiv unprecedented security guarantees in exchange for a ceasefire. However, no specific agreements have been reached yet, and the strict sanctions regime in the energy sector remains in place. The global oil market continues to face pressure from an oversupply and weakening demand: Brent quotes have dropped to around $60 per barrel – the lowest level since 2021 – reflecting the formation of a surplus. The European gas market is demonstrating resilience: even at the peak of winter demand, gas storage facilities in the EU are nearly 69% full, while stable LNG and pipeline gas supplies keep prices at a moderate level.
Meanwhile, the global energy transition is gaining momentum. Many countries are setting new records for generation from renewable sources, although traditional coal and gas-fired power plants still play a significant role for the reliability of energy systems. In Russia, after a summer price spike, authorities have implemented strict measures (including an extension of the fuel export ban), stabilizing the situation in the domestic oil products market. Below is a detailed overview of key news and trends in the oil, gas, electricity, and raw materials sectors for this date.
Oil Market: Oversupply and Weak Demand Weigh on Prices
Global oil prices remain under downward pressure, having reached multi-year lows amid fundamental factors. The North Sea benchmark Brent is trading around $59–60 per barrel, while American WTI is in the range of $55–57. Current levels are approximately 15–20% lower than a year ago, reflecting a gradual market retreat after peak prices during the energy crisis of 2022–2023. The dynamics of prices are influenced by several key factors:
- OPEC+ Supply: The oil alliance has generally maintained substantial supply volumes in the market. Previously voluntary production restrictions were partially lifted, and at the beginning of 2026, OPEC+ decided to maintain current production levels without additional increases. Participants in the agreement stated their commitment to market stability and readiness to cut production again if oversupply increases. The upcoming OPEC+ meeting scheduled for January 4, 2026, is under analysts' scrutiny – expectations are for signals regarding possible cartel intervention to support prices.
- Demand Slowdown: Global oil consumption growth has notably weakened. According to revised forecasts from the International Energy Agency (IEA), global oil demand will increase by only approximately 0.7 million barrels per day (up from +2.5 million in 2023). OPEC estimates demand growth at about +1.2–1.3 million b/d. The reasons include a slowing global economy and a previous period of high prices that stimulated energy conservation. A particular contribution to demand suppression is coming from China: industrial growth and fuel consumption in the second half of 2025 fell below expectations due to overall economic weakening (industrial output growth reached minimum levels in the past 15 months).
- Geopolitics and Sanctions: Growing expectations for peace settlement in Ukraine add a bearish factor to the oil market, implying the complete return of Russian volumes to the global market in the near future. Simultaneously, the West's sanctions confrontation with oil-exporting countries has intensified: the US imposed the strictest sanctions against Russian oil companies in recent years during the fourth quarter (including restrictions on transactions with major producers), which has already forced several Asian buyers to reduce imports from Russia. Furthermore, Washington has taken the unprecedented step of declaring a "blockade" on tankers carrying sanctioned oil going to and from Venezuela, attempting to cut off alternative sales channels. While these measures temporarily reduce the availability of some supplies, a significant portion of sanctioned oil continues to enter the market through shadow schemes, accumulating in floating storage and being sold at significant discounts.
The cumulative impact of these factors creates a persistent oversupply over demand, keeping the oil market in a state of moderate surplus. Prices remain near the lower boundary of recent years, receiving no impetus for either growth or sharp decline. Market participants are awaiting further signals – both from negotiations regarding Ukraine and from OPEC+ actions – which could alter the risk balance in oil prices.
Gas Market: Winter Demand is Rising, But Large Reserves Keep Prices in Check
On the European gas market, the focus is on navigating the peak of the winter season. Cold weather in December has led to increased gas consumption; however, high storage levels and stable supplies have helped avoid sharp price fluctuations. According to Gas Infrastructure Europe, underground gas storage in the EU is currently approximately 68–69% full – this is lower than a year ago (around 77% on the same date), but still provides a significant reserve for stability. Thanks to this, as well as record LNG imports and a steady inflow of gas through pipelines from Norway, current demand is being met without difficulty. The European benchmark index (TTF) fluctuates around €25–30 per MWh, remaining several times below the crisis levels of 2022.
A slight increase in gas prices observed in early December was associated with the first cold snap, but the market quickly stabilized. The loading of LNG terminals remains high – including due to the full return of the American Freeport LNG plant – which compensates for the seasonal demand increase. At the same time, major traders have taken their largest "short" positions in gas futures since 2020, effectively betting on continued price stability. This reflects confidence that stocks and supplies will be sufficient; however, experts warn that any sudden disruption in imports or abnormal cold weather could change the situation. As this winter's inventory levels are somewhat below last year's, any unexpected shock (e.g., technical failure or geopolitical incident) could quickly increase price volatility. Overall, the European gas market currently demonstrates balance: stable LNG and pipeline supplies help contain prices, while authorities and energy companies have intensified monitoring to respond promptly to potential energy security threats.
International Politics: Peace Dialogue Inspires Hope, Sanction Pressure Persists
In the second decade of December, diplomatic efforts to resolve the conflict in Eastern Europe have significantly intensified. On December 15–16, negotiations involving the US special representatives (from the Donald Trump administration), Ukrainian leadership, and key EU leaders were held in Berlin. The American side offered an unprecedented security guarantee scheme for Ukraine, comparable to NATO principles, in exchange for a ceasefire – a step that had not previously been openly discussed. For the first time since the war began in 2022, several European leaders cautiously welcomed such a shift: they spoke of a conceptually foreseeable prospect of at least a temporary ceasefire. German Chancellor Friedrich Merz noted the emergence of "a real opportunity for a ceasefire," while Polish Prime Minister Donald Tusk stated that he had heard from American negotiators for the first time about the US willingness to provide Ukraine with clear military guarantees in the event of new aggression. These signals have become the first rays of hope for the peaceful resolution of the largest conflict in Europe since World War II.
However, the path to a durable peace remains challenging. Moscow has not yet demonstrated a willingness to make concessions: Russian officials have indicated that fundamental demands (including Ukraine's neutral status and territorial issues) remain in force. Kyiv, under intense pressure from Washington, is considering the possibility of painful compromises but publicly rules out any recognition of territorial losses. Thus, negotiations continue, but no final agreement is in sight – meaning the current sanctions regime remains unchanged. Moreover, in the absence of definitive progress, the West is not easing pressure: the US and allies imposed new sanctions against the Russian oil and gas sector in the fall, while the European Union extended restrictions at the last summit, declaring its intention to adhere to price ceilings on Russian oil and petroleum products. Simultaneously, Washington has significantly increased its military and political presence in the Caribbean, accompanying this with sanctions against vessels associated with Venezuela, effectively complicating the export of Venezuelan oil (an important ally of Moscow).
Markets are closely monitoring the development of this dual situation. On one hand, the success of peace negotiations could eventually lead to a relaxation of sanctions and the return of significant volumes of Russian energy resources to the global market, improving global supply. On the other hand, a prolonged or failed dialogue threatens new rounds of sanction confrontation, which would sustain uncertainty and risk premium in oil and gas prices. In the coming weeks, investors' attention will be focused on whether the parties can turn the current diplomatic initiatives into a concrete peace settlement plan or if the rhetoric around sanctions will once again intensify. Regardless, the outcome of the Berlin meetings and subsequent consultations will have a long-term impact on the global energy landscape, determining the trajectory of relations between major powers and the conditions of operation for the global FEC in the new geopolitical environment.
Asia: India Faces Sanction Pressure, China Increases Production and Import
- India: Faced with increasing sanction pressure from the West, India is forced to adjust its oil strategy. In the fall, the US imposed direct restrictions against several large Russian oil companies, and by December, some Indian refiners had curtailed purchases of Russian oil to avoid secondary sanctions. In particular, the largest private refinery Reliance Industries has suspended imports of Russian oil to its Jamnagar plants since November 20. This marks a sharp decline in Russia's share of Indian imports, which had been significant since 2023. Nevertheless, New Delhi is not ready to completely give up accessible Russian crude: supplies from Russia remain a crucial factor for energy security, especially considering the discounts provided (Russian Urals is reportedly sold to India at $5–7 cheaper than Brent). The Indian government is striving for a balance between complying with sanctions and meeting domestic demand: for instance, schemes for payments for Russian oil in national currencies and engaging non-sanctioned traders are being considered. Concurrently, India continues its long-term goal of reducing imports. Following Prime Minister Narendra Modi's bold announcement on Independence Day about the launch of a large-scale deepwater exploration program, there are already early results: the state-owned company ONGC has drilled ultra-deep wells in the Andaman Sea, and the hydrocarbon reserves found there are considered promising. The country is also actively investing in expanding refining and alternative energy sources. All these steps aim to gradually reduce India's critical dependence on oil and gas imports.
- China: The largest economy in Asia continues to increase both energy resource imports and its domestic production, adapting to the changing market conditions. Chinese companies remain the leading buyers of Russian oil and gas – Beijing has not joined western sanctions and is using the situation to import raw materials on favorable terms. According to China's customs statistics, in 2024, the country imported approximately 212.8 million tons of oil and 246.4 billion cubic meters of natural gas, increasing volumes by 1.8% and 6.2%, respectively, compared to the previous year. In 2025, imports continued to grow, albeit at a more moderate pace due to a high base and economic slowdown. Meanwhile, China is actively stimulating domestic oil and gas production: in the first three quarters of 2025, national companies extracted around 180 million tons of oil (approximately +1% year-on-year) and over 200 billion cubic meters of gas (+5% year-on-year). The expansion of the domestic resource base partially compensates for rising demand but does not eliminate dependency on external supplies – analysts note that China still imports about 70% of the oil it needs and approximately 40% of its gas. The slowdown of the Chinese economy in the second half of 2025 has led to a decline in energy consumption growth (demand for oil products and electricity grew more slowly than expected), which has somewhat eased pressure on global raw material markets. At the same time, the Chinese authorities aimed at balancing the domestic market increased export quotas for petroleum products for their refineries at the end of the year – this will allow surplus volumes of fuel (particularly diesel and gasoline) to be directed to the external market. Thus, the two largest Asian consumers – India and China – continue to play a key role in global raw material markets, combining strategies for ensuring imports with the development of their own production and infrastructure.
Energy Transition: Growth of Renewable Energy and Role of Traditional Generation
The global transition to clean energy advanced another step forward in 2025, accompanied by new records in the renewable energy sector. In Europe, total generation from solar and wind power plants increased again, and like in 2024, it exceeds the electricity output from coal and gas thermal power plants. The commissioning of new renewable energy capacities continued at a rapid pace, especially in solar and wind energy: EU countries invested significant funds in "green" generation while simultaneously accelerating the development of grid infrastructure to integrate renewable sources. Coal's share in the European energy balance, which temporarily increased during the crisis of 2022–2023, is declining again due to the normalization of gas supplies and environmental policies. In the US, renewable energy also reached historic levels: according to preliminary data, more than 30% of all electricity generated in 2025 came from renewables. The combined generation of wind and solar in America for the first time in a year exceeded electricity production at coal plants, reflecting the continued trend that began earlier in the decade. This was made possible despite attempts by authorities to support the coal industry – the inertia of previously planned renewable energy projects and market factors (relatively low gas prices for most of the year) contributed to further "greening" of the US energy system.
China remains the leader in renewable energy development: this country introduces dozens of gigawatts of new solar panels and wind turbines each year, continuously updating its generation records. In 2025, China again increased its installed renewable energy capacity to unprecedented levels – investments in the sector totaled hundreds of billions of yuan. Simultaneously, Beijing actively develops energy storage technologies and modernizes its energy grid to accept unstable generation. However, given the colossal volumes of energy consumption, China still heavily relies on coal and gas to cover its base load – making it the world's largest carbon emitter, but also the primary market for clean technology implementation. Analysts estimate that global investments in clean energy (renewables, storage, electric vehicles, etc.) in 2025 surpassed $1.5 trillion for the first time, outpacing investments in the fossil sector. The decarbonization trend is becoming one of the defining factors for the global FEC: more and more companies and financial institutions are committing to reducing emissions, redirecting capital into low-carbon energy development projects. At the same time, the transition period requires balancing – traditional energy sources continue to ensure the basic reliability of energy systems. Therefore, the growth of renewables goes hand in hand with the maintenance of sufficient traditional generation capacity to guarantee stable energy supply as the industry undergoes reform.
Coal: Global Demand at Record Levels, Market Remains an Important Part of the Energy Balance
Despite the acceleration of the energy transition, the global coal market in 2025 demonstrates resilience. According to the International Energy Agency (IEA), global coal demand increased by another 0.5% this year, reaching approximately 8.85 billion tons – a new historical maximum. Coal remains the largest single source of electricity generation on the planet, with energy systems in several Asian countries heavily relying on it. At the same time, the IEA expects that in the coming years, coal demand will stabilize at a plateau and begin to decline gradually by 2030, as renewable energy, nuclear power, and natural gas gradually push coal out of the energy balance. Achieving global climate goals is considered a critical step to phase out coal – it currently accounts for approximately 40% of global CO2 emissions from fuel combustion. However, implementing these plans faces objective difficulties, as the coal sector continues to sustain industry and power networks in many regions.
An important feature of 2025 has been the divergent trends in key coal-consuming countries. In India, for example, coal use unexpectedly decreased (only the third time in the past 50 years) – this was facilitated exclusively by abundant monsoon rains, which allowed for record hydropower generation and reduced pressure on coal-fired plants. In contrast, coal consumption in the US increased: due to higher gas prices and steps by the Trump administration to support coal plants (including delaying their closure), coal once again claimed a greater share in electricity generation. Nevertheless, a decisive contribution to global figures comes from China, which accounts for about 55% of global coal consumption. In 2025, demand in China remained close to record levels, although the commissioning of new renewable capacities was sufficient to restrain further growth in coal burning – forecasts indicate that coal consumption in China will begin to slowly decrease by the end of the decade. Overall, the coal market is currently in a state of relative equilibrium: production and exports from the major supplying countries (Australia, Indonesia, Russia, South Africa) steadily meet high demand, and prices remain at moderate levels without sharp spikes. The sector continues to be one of the pillars of the global energy system, though it is under increasing pressure from environmental agendas.
Russian Oil Products Market: Situation Stabilizes After Summer Crisis
In the Russian fuel market, by the end of the year, signs of normalization are observed after the emergency situation last summer. Recall that, in August-September 2025, wholesale exchange prices for gasoline and diesel reached record heights, caused by a supply shortage amid peak agricultural work and repairs at refineries. The government had to intervene swiftly by introducing strict restrictive measures. In particular, a complete ban on the export of motor gasoline and diesel fuel was implemented, initially planned until the end of September, which has since been extended several times. The latest extension has expanded the embargo to the entire fourth quarter and until December 31, 2025. This measure has guaranteed the redirection of approximately 200–300 thousand tons of motor fuel monthly to the domestic market, which was previously exported abroad. Concurrently, authorities intensified control over the distribution of oil products within the country: oil companies are instructed to prioritize meeting the needs of the domestic market and to eliminate the practice of reselling fuel to each other through the exchange. The preservation of the damping mechanism (reverse excise tax) and direct budget subsidies continue to compensate manufacturers for lost revenues from sales of fuel in the domestic market, encouraging them to retain sufficient volumes for Russian consumers.
The complex of measures undertaken has already yielded results – the fuel crisis has been localized. By the beginning of winter, wholesale prices for gasoline receded from peaks, while retail prices at gas stations have increased on average by less than 5% since the beginning of the year (which corresponds to the overall inflation level). Filling stations are stocked with fuel, and there are no supply disruptions in the regions. The government states it is ready to act preventively in the future: if the situation worsens again, restrictions on the export of oil products can be promptly reinstated or extended, and the necessary volumes of fuel will be quickly redirected to the domestic market from reserves. Currently, the situation has stabilized – the domestic market has entered winter without shortages, and prices for end consumers are held within acceptable limits. Authorities continue to monitor the situation at the highest level to prevent a repeat of last year’s sharp fuel price spikes and ensure predictability for businesses and the population.
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