Oil, Gas, and Energy Sector News for Monday, December 29, 2025. Global Oil and Gas Markets, Electricity, Renewable Energy, Coal, Petroleum Products, and Refineries: Key Events, Trends, and Investor Expectations.
In this edition, we provide an overview of key events in the fuel and energy complex (FEC) as 2025 comes to a close, along with investor expectations for 2026. Global oil, gas, and electricity markets are stabilizing after a tumultuous year: following summer declines in demand, prices have begun to recover modestly. Geopolitical uncertainty remains, but some optimists hope for a relaxation of sanctions and a return to normal export flows. Meanwhile, the trend towards increasing production and expanding renewable energy sources is strengthening, with coal and gas remaining critical for energy balance during peak loads.
Global Oil Market: Modest Growth Amid Oversupply
Brent is trading at around $61–63 per barrel, while WTI is hovering near $57–59, which is 15–20% lower than a year ago. The oil market shows relative stability following demand declines in 2025. Key influencing factors include:
- OPEC+ Policy: OPEC+ countries decided at the end of November to maintain production levels from late 2025, abandoning a planned increase in quotas for Q1 2026. This decision has led to limited price growth while keeping the alliance's market share below historical highs.
- US Production Growth: Independent oil producers in the US are expanding shale production, reaching a record output of approximately 13 million barrels per day. The oversupply is exerting downward pressure on the prices of oil and petroleum products.
- Global Demand: Oil consumption is rising modestly (according to estimates from the IEA and OPEC, not more than +0.8–1.0% in 2025), significantly lower than the growth rates seen in 2023. Slowing economic growth and energy-saving measures are curtailing the appetites of major consumers, particularly in China.
- Geopolitics and Sanctions: Events in the Middle East (attacks on oil facilities, escalation of conflicts) and Africa periodically cause price fluctuations, but the global market is responding with caution. Peace negotiations regarding Ukraine have fostered optimism regarding the easing of some sanctions; in the meantime, Russian oil is being sold at a considerable discount (Urals ~$40/barrel, significantly lower than Brent).
European Gas Market: Record Supplies and Sharp Demand Spikes
The European gas market enters winter with unprecedented high supplies in underground storage facilities, driving prices down to yearly lows (TTF dropped to ~$330/thousand m3, around €28/MWh). However, New Year’s cold weather has spurred demand: gas withdrawals from storage reached record levels and prices have rebounded to ~$345/thousand m3. Key trends include:
- Declining Russian Imports: EU countries have virtually ceased imports of Russian pipeline gas – Russia’s share in imports has dropped to 10–15%. Alternative supply sources have become predominant: LNG imports from the US, Africa, and the Middle East have ramped up, and regasification infrastructure is being expanded (new terminals are being commissioned in Germany and Spain).
- US-EU LNG Deal: The agreement for energy supplier deliveries worth $750 billion from 2026 to 2028 is progressing slowly. Due to falling prices, the EU has reduced its volumes of US LNG purchases (from September to December 2025, supplies to the EU from the US totaled around $29.6 billion, significantly lower than annual commitments). Low prices have diminished economic incentives.
- Weather Risks: Even with high inventories, gas prices react to extreme cold snaps. New price spikes could occur during prolonged cold weather. Additionally, environmental restrictions on production (emissions) are limiting gas production capacities in Europe.
- Asian Demand: China and India are actively importing LNG for winter needs. China is expanding its domestic production but remains the world's largest importer of gas and oil. India is ramping up purchases of inexpensive gas and oil from Russia, supporting global demand.
Asia: Record Production in China and Rising Imports in India
- China: Domestic oil and gas production is reaching historical records. By the end of 2025, oil production exceeded 4.3 million barrels per day, and gas production achieved new heights. Beijing is investing in refinery and power generation capacity expansions to reduce dependence on imports. Slowing economic growth has limited domestic demand growth, but China remains the world's largest buyer of energy resources.
- India: Despite US pressure and new restrictions, refineries continue to source Russian crude. In December, oil supplies from Russia to India are estimated at over 1.2 million barrels per day (after a record of 1.77 million in November) – refineries hurried to secure cheap crude ahead of new sanctions. Talks between Modi and Putin reaffirmed commitments to energy cooperation.
- Southeast Asia: Countries in the region continue to build coal-fired power plants to support industry. High demand for affordable electricity is restraining a shift away from coal – new thermal power plants are being commissioned in Vietnam, the Philippines, and other countries.
Renewable Energy: Record Capacity and Investments
The trend towards “clean” energy is intensifying: in 2025, the world added a record capacity of renewable energy (approximately 750 GW), with investments in green energy exceeding $2 trillion. New solar and wind facilities are supplying a significant portion of electricity in many countries. However, important characteristics remain:
- Hybrid Systems: Even with rapid growth in renewables, coal, gas, and nuclear power are necessary for the reliability of energy systems. Global energy consumption is still about 80% dependent on fossil fuels. During peak load periods (or during calm winds/nighttime generation), countries are forced to activate gas or coal plants to avoid outages.
- Regional Characteristics: Leaders in renewable energy adoption are developed countries and China. The US and EU are introducing subsidy programs for the accumulation and localization of renewable energy equipment, but strategic reserves of oil and gas remain in case of disruptions. China is concurrently building hydroelectric and nuclear power plants to balance energy systems while supporting programs to increase hydrocarbon production.
- Electricity Market: Frequent “overproductions” of renewable energy are driving down electricity prices during peak hours (negative prices have emerged intermittently in Europe and China). The growing share of clean generation is encouraging the development of energy storage infrastructure and grid modernization, as well as a carbon credit market to limit emissions. Overall, annual trends confirm a steady transition, but traditional thermal power plants will remain in the grid for a long time.
Coal Market: Stable Demand and Moves Towards “Greening”
Coal continues to play an important role in the energy balance. Global coal consumption reached a record ~8.8 billion tons by the end of 2025, a 0.5% increase from 2024 levels. Most of the growth is driven by Asia:
- China and India: These countries continue to actively burn coal for electricity generation and steel production. While some old mines are closing, new large coal-fired power plants are being commissioned (in China, more than 50 GW of new projects). India is rapidly expanding coal generation to meet growing economic demand.
- Exporters and Prices: Indonesia, Australia, Russia, and South Africa maintain high production and supply levels. Energy coal prices have stabilized in the range of $120–140/ton (Newcastle index), which is below last year's peaks but ensures the industry's profitability. Coal inventories at Asian importers are adequate, preventing sharp price fluctuations.
- Developed Countries' Withdrawal: In the US and Europe, coal generation is being actively reduced. Environmental restrictions and the growth of renewables have led to a double-digit decline in coal's share of the Western energy balance. However, the global trend toward “greening” is being offset by increased demand in developing countries.
Russian Oil Products Market: Government Measures and Prices
In Russia, following the summer price increase for gasoline and diesel, the government has undertaken measures to stabilize the market:
- Fuel Export Restrictions: The export ban on gasoline and diesel for most companies (with the exception of government contracts) has been extended until the end of 2025. This has released additional volumes into the domestic market and curbed wholesale price increases.
- Price Stabilization System: As of October 1, 2025, “deviation from the norm” for the price stabilization mechanism for gasoline and diesel is temporarily not taken into account. This has increased subsidies for oil refiners and reduced wholesale prices. For example, the exchange price for AI-95 in mid-December was 8–10% lower than September highs.
- Current Situation: Wholesale fuel prices continue to decline moderately, and there is no shortage in the market. Fuel stocks and supplies from refineries ensure stability until January. Authorities consider the situation stable, but they are prepared to implement new measures if global prices rise.
