Current News in the Oil, Gas, and Energy Sector for Saturday, December 27, 2025: Oil, Gas, Electricity, Renewables, Coal, Oil Products, and Key Trends in the Global Energy Sector — Overview and Analysis for Investors and Market Participants.
On the diplomatic front, intensive efforts to resolve the protracted conflict in Eastern Europe are ongoing, yet tangible results remain elusive. The United States and European allies have offered Ukraine unprecedented security guarantees in exchange for a ceasefire, instilling cautious optimism regarding the potential for a peace agreement. Nonetheless, negotiations concluded the year without breakthroughs, and the stringent sanctions regime against the Russian energy sector remains fully in force.
The global oil market is under pressure from an oversupply and moderate demand as the year comes to a close. The price of benchmark Brent crude hovers around $62-$63 per barrel, near its lowest values since 2021, indicating a formation of crude surplus. The European gas market shows resilience: even at the peak of winter demand, gas storage facilities in the EU are about two-thirds full, virtually eliminating the risk of shortages. Stable supplies of liquefied natural gas (LNG) and alternative pipeline fuels keep wholesale prices at moderate levels, significantly below the peaks of 2022, easing the burden on consumers.
Meanwhile, the global energy transition is gaining momentum. Many countries are recording new records for electricity generation from renewable sources; however, traditional coal and gas power plants still play an important role in ensuring the reliability of energy systems. Simultaneously, interest in nuclear energy is resurging in several regions as a stable, low-carbon energy source capable of reducing dependence on fossil fuels.
OPEC+ Maintains Quotas to Stabilize the Market
- At the December meeting, OPEC+ alliance participants decided to maintain current oil production quotas for the first quarter of 2026 to prevent a potential oversupply in the market.
- Since spring 2025, OPEC+ countries have collectively returned about 2.9 million barrels per day to the market from previously reduced volumes, yet the overall production limit of approximately 3.2 million barrels per day remains in effect and has been extended through the end of 2026.
- The meeting took place against the backdrop of a new attempt by the U.S. to reach a peace agreement between Russia and Ukraine. OPEC+ is aware that the success of negotiations and a potential easing of sanctions could bring additional oil volumes to the market, while a failure would intensify sanction pressures and further restrict Russian exports.
Oil Prices Remain Low
Global oil prices end 2025 without sharp fluctuations, remaining within a relatively narrow range due to a balance of stable demand and sufficient supply.
- Earlier this week, oil prices increased by approximately 2% on strong macroeconomic data from the U.S.: GDP growth in Q3 outperformed forecasts, bolstering expectations of rising fuel demand.
- Price support also came from supply disruption risks. New U.S. sanctions against the Venezuelan oil sector and attacks on export infrastructure in the Black Sea heightened market concerns regarding supply stability.
- However, by the end of 2025, Brent crude had depreciated by approximately 15%. The market showed an unusually narrow price corridor (~$60-$80 per barrel) even amid geopolitical turmoil—largely due to record production levels in the U.S. (over 13.5 million barrels per day) and increased supplies from non-OPEC countries compensating for local disruptions.
- Refineries ramped up output of oil products, while commercial crude oil and fuel inventories in the U.S. increased in December. This kept gasoline and diesel prices stable toward the year-end, benefiting consumers.
Natural Gas: Comfortable Reserves and Stable Prices
The natural gas market enters winter relatively calmly. In Europe, even periods of cold weather have not triggered panic, given the high level of reserves and diversified supply options.
- EU gas storage facilities are over 70% full by early January, significantly above multi-year averages. This buffer reduces the risk of fuel shortages even amid colder temperatures.
- LNG imports remain high, allowing for compensation for the cessation of pipeline supplies from Russia. Major European consumers (Germany, Italy, etc.) are actively purchasing LNG on the spot market, diversifying their energy supply sources.
- In the U.S., natural gas prices (Henry Hub) remain around $5 per million BTU. Record production levels and high LNG export volumes maintain balance in the American market, although periods of abnormal cold can still lead to brief price spikes.
Geopolitics and Sanctions: Impact on Energy Supplies
Political conflicts and sanction restrictions continue to significantly impact global energy markets, simultaneously creating both threats of supply disruptions and hopes for potential improvements in the situation.
- The U.S. administration has tightened measures against the Venezuelan oil sector: sanctions have been imposed on tankers transporting Venezuelan oil. In December, several vessels were detained and forced to return, potentially leading to overflowing local storage facilities and forced production cuts in the country.
- Amid the ongoing conflict in Ukraine, attacks on energy infrastructure have intensified. In November, a Ukrainian drone damaged the CPC terminal near Novorossiysk, reducing Kazakhstan's CPC Blend oil exports in December by about one third (to ~1.14 million barrels per day) and forcing redirection of some volumes away from the Black Sea.
- Despite the tightening of U.S. sanctions against leading Russian oil companies (Rosneft and LUKOIL) in autumn, the direct impact of these measures on the global market has proven limited. Russian oil exports remain close to multi-month highs due to the restructuring of logistical chains, although Urals crude trades at a significant discount to Brent.
- According to Reuters estimates, oil and gas revenues for the Russian federal budget in December 2025 will amount to about 410 billion rubles, nearly half of what it was a year earlier and close to the lowest levels in recent years (comparable to the disastrous August of 2020). Overall, revenues from oil and gas for 2025 are estimated at approximately 8.44 trillion rubles—nearly 25% lower than the 2024 level and below the revised forecast of the Ministry of Finance—highlighting the severity of the impact of low prices and sanctions on Russia's revenues.
- Russia, for its part, does not plan to reduce exports: the pipeline monopoly Transneft has stated that oil pumping volumes will remain approximately at the level of 2025 in 2026. This indicates an intention to maintain stable supplies of Russian oil to the international market despite sanction pressures.
Renewable Energy: Records and Investments
The green energy sector continues to experience rapid growth, setting new records for capacity additions and capital inflows, despite certain political and economic risks.
- On December 5, the UK achieved a historic peak in wind power generation—around 23,825 MW, covering over half of the country's total demand at that time. The record was facilitated by strong winter winds and the expansion of offshore wind farms.
- According to BloombergNEF, global investments in new renewable energy projects reached a record $386 billion in the first half of 2025. The majority of funds were directed toward the construction of solar and wind power plants, as well as energy storage systems to integrate renewables into power grids.
- In the U.S., a federal court overturned a previously enacted ban on constructing new wind energy facilities on federal lands and offshore. This decision paves the way for the realization of major offshore wind farm projects and supports several states' plans to increase the share of clean energy.
- China maintains its global leadership in renewables: the total installed capacity of renewable energy in the country exceeds 1.88 TW (about 56% of the total generating capacity). Large-scale deployment of solar and wind stations, as well as energy storage systems, has allowed China to keep CO2 emissions stable despite economic growth.
Nuclear Energy: The Return of Major Capacity
After a long decline, the global nuclear sector is showing signs of revival. Many countries are re-evaluating the role of nuclear generation as a stable source of low-carbon energy against the backdrop of efforts to reduce reliance on fossil fuels.
- In Japan, preparations are underway for the phased restart of the country’s largest nuclear power plant, Kashiwazaki-Kariwa. TEPCO has received approval from Niigata Prefecture authorities and plans to launch unit No. 6 with a capacity of 1,360 MW on January 20, 2026—the first reactor to be brought online by the company since 2011. Full recovery of the 8.2-gigawatt station will take place in phases over several years.
- The Japanese government has announced measures to support the nuclear sector aimed at doubling the share of nuclear generation in the energy balance. A system of state loans and guarantees for the modernization of existing reactors is being introduced; currently, 14 out of the 33 reactors that were halted after the Fukushima-1 disaster have resumed operation.
- Interest in returning to nuclear energy is observed in other countries as well. In Europe, Finland has commissioned the Olkiluoto-3 reactor; France and the UK are investing in constructing modern nuclear plants, while the U.S. is considering extending the lifespan of existing units and funding the development of small modular reactors.
Coal Sector: Peak Consumption Before Decline
The global coal market reached an all-time high in 2025; however, experts expect a trend reversal in the coming years. According to the International Energy Agency (IEA), global coal consumption increased by about 0.5% and reached approximately 8.85 billion tons for the year. A gradual decline in coal demand is forecasted by the end of the decade, as renewables, nuclear, and natural gas gradually displace it from power generation.
- In the U.S., coal consumption at power plants increased in 2025. This was a result of last year’s spike in gas prices and an administration directive extending the operation of certain coal-fired power plants previously slated for closure.
- China remains the largest consumer of coal, accounting for around 60% of the country's electricity generation. In 2025, coal demand in China stabilized; a gradual decrease is expected by 2030 due to the mass introduction of renewable capacities. Beijing's policy aims to peak emissions by 2030, which implies limiting coal's role in the energy mix.
Oil Products and Refining: High Margins for Refineries
By the end of 2025, the global oil products market shows increased profitability for refineries. Falling oil prices combined with sustained demand for gasoline, diesel, and jet fuel have contributed to rising refining margins in many regions. Refiners are benefiting from relatively cheap raw materials while still enjoying a healthy level of fuel consumption.
- Global indicative refining margins have risen to their highest levels in recent years. Notably high profitability is seen in diesel fuel sales, which remains strong in the transport sector and industry.
- Active construction of new refineries in Asia and the Middle East (including major complexes in China and Persian Gulf countries) is increasing global refining capacity. However, simultaneous closures of outdated plants in Europe and North America maintain balance in the oil products market, preventing oversupply and sustaining high margins for operational refineries.
- In Russia, authorities extended the ban on gasoline and diesel exports following a fuel crisis in the summer to saturate the domestic market and reduce prices. These measures stabilized the situation domestically but simultaneously reduced the supply of diesel on the global market, contributing to the high margins for European and Asian refiners.
Corporate News: Transactions and Strategies of Energy Companies
The end of the year is marked by significant corporate moves in the energy sector, reflecting companies' efforts to optimize their asset portfolios and adapt to new market conditions. Major oil and energy corporations are reassessing strategies, focusing both on increasing the efficiency of traditional businesses and investing in energy transition and sustainable projects.
- BP announced the sale of 65% of its subsidiary Castrol (a lubricant manufacturer) to the American investment fund Stonepeak for $6 billion. The deal values the entire Castrol business at $10.1 billion; BP will retain a 35% stake in the new joint venture. The proceeds are earmarked for debt reduction and dividend payments, aligning with the strategy to enhance returns in the traditional oil segment.
- Despite sanctions, foreign partners are showing interest in Russian oil and gas projects. In particular, India's ONGC and Japan's SODECO have maintained their stakes in the Sakhalin-1 project, while a preliminary agreement between ExxonMobil and Rosneft regarding compensation for losses in prior years signals major players' readiness to resume cooperation once the political landscape normalizes.
- The convergence of the technology and energy sectors continues. For instance, American tech giant Alphabet (the parent company of Google) announced in December the acquisition of Intersect Power for $4.7 billion, a company engaged in renewable energy projects and energy infrastructure (including power supply for data centers). This move will allow Alphabet to accelerate its development of renewable-based generation and reduce its data centers' reliance on overloaded power grids.
