Energy Market News for Sunday, December 7, 2025: Oil and Gas Prices, OPEC+ Decisions, Sanction Pressure on Russian Energy Sector, Fuel Situation in Russia, Role of the EU, USA, China, and India, Coal Market Trends, Renewables, and Oil Products - Analytical Review for Investors and Global Energy Market Participants.
Key events in the global fuel and energy complex as of December 7, 2025, demonstrate that world markets continue to balance between resource oversupply and geopolitical risks. Oil prices remain near their lowest values in the last two years: Brent crude is trading at around $62–64 per barrel, while American WTI is at approximately $59. These levels are significantly lower than mid-year figures, as the market is under pressure from increased supply amid relatively stable demand and cautious optimism regarding possible progress in peace negotiations over Ukraine. The European gas market is entering winter without signs of deficit: underground gas storage in the EU is still filled at about 75–80%, and wholesale prices (TTF hub) are holding around €28–30 per MWh, which is considerably below the extreme peaks of previous years. Record LNG supplies and mild weather at the beginning of the season provide stability and relatively low gas prices.
Meanwhile, geopolitical tensions concerning energy markets persist. Western countries are not easing their sanction pressure on the Russian oil and gas sector: the European Union is legally formalizing a complete refusal to import Russian pipeline gas by 2027 and is eager to accelerate cuts in oil purchases from Russia. Diplomats’ attempts to achieve breakthroughs in conflict resolution have yet to yield tangible results, although the USA and Ukraine conducted consultations in early December regarding a peaceful plan. Energy supplies remain at risk due to potential military incidents; however, the global market is currently compensating for local disruptions. Within Russia, authorities are extending emergency measures to stabilize the fuel market following the autumn gasoline and diesel shortage – oil product exports remain tightly restricted to ensure the domestic market is adequately supplied. Simultaneously, the global energy sector is accelerating its "green" transition: investments in renewable energy sources are hitting new records, and leading economies are announcing ambitious plans to reduce reliance on fossil resources.
Oil Market: Prices at Two-Year Lows Due to Oversupply and Hopes for Peace
- Global Supply: The global oil market remains oversupplied. OPEC+ countries and other producers are collectively producing more oil than the market consumes at the current demand level. Commercial crude inventories in key regions are at high levels, intensifying downward pressure on prices.
- OPEC+ Decisions: The cartel and its allies are showing caution. At the latest meeting, leading OPEC+ participants agreed to maintain production quotas for Q1 2026 at December 2025 levels, effectively extending current restrictions. The coalition is prepared to adjust production swiftly if needed: a reserve capacity of around 1.65 million barrels per day could be gradually reintroduced to the market if conditions require.
- US Production at a Peak: Oil production in the United States is near record levels. Despite a reduction in the number of active rigs, technological efficiency has allowed production in mid-2025 to reach new highs (in the continental states, production exceeded 11 million barrels per day). The high production level in the US adds significant volumes to the market, partially compensating for OPEC+ cuts.
- Local Disruptions: Recent incidents had only a short-term impact on exports. In early December, Ukrainian drones damaged one of the terminals on the Black Sea through which Kazakh oil is exported, but shipments quickly resumed via a backup terminal. Additionally, Libya's largest oil terminals temporarily shut down on December 5-6 due to a storm. These events did not trigger a price spike — the market can absorb short-term interruptions given the current balance of supply and demand.
- Price Benchmarks: Brent remains within a narrow range of $62–64 per barrel (over 20% lower than early autumn levels). Investors expect prices to remain subdued in the near term: a sharp revival in demand is not visible, and the easing of monetary policy in the USA only moderately supports raw material markets. At the same time, any new geopolitical shock (escalation of conflict or significant production disruptions) could cause a short-term price spike.
Gas Market: Europe Enters Winter with Comfortable Supplies and Low Prices
- High Storage Levels: By early December, European gas storage facilities are filled to approximately ¾ (75-80%). Stocks are gradually depleting with the onset of colder weather but still significantly exceed average levels for this time of year. The created stock cushion sharply reduces the risk of gas shortages in the heart of winter.
- Record LNG Imports: LNG supplies to Europe remain at historically high levels. Reduced demand for LNG in Asia has freed up additional volumes for the European market, partially compensating for the cessation of pipeline supplies from Russia. The USA, having increased LNG exports, has become a key external gas supplier for the EU amid rising demand.
- Diversification of Sources: European countries are enhancing energy security through alternative suppliers. Gas purchases from Norway, Algeria, Qatar, Nigeria, and other regions have increased. New infrastructure — from LNG terminals to international interconnectors — is operating at maximum capacity, ensuring a stable fuel influx from various parts of the globe.
- Low Prices: Wholesale gas quotes in the EU are currently an order of magnitude lower than the peaks of 2022. The Dutch TTF index is holding below €30 per MWh (about $330 per thousand cubic meters) and has continued to decline smoothly for the third consecutive week. Despite seasonal increases in consumption and occasional declines in renewable energy generation, the market remains balanced due to ample supply. New price spikes have so far been avoided.
Russian Market: Fuel Shortages and Continued Export Restrictions
- Gasoline Export Ban: The Russian government introduced a complete temporary ban on the export of gasoline by all producers and traders (except for minimal deliveries under intergovernmental agreements) back in late August. Initially, the measure was set to last until October, but the autumn fuel crisis forced its extension: in fact, the ban remains in place until the end of the year to maximize internal gasoline supply.
- Diesel Restrictions: Simultaneously, the ban on diesel fuel exports for independent traders has been extended until the end of 2025. Oil companies with their own refineries are allowed limited diesel exports to avoid halting processing due to full storage tanks. These measures aim to prevent a recurrence of the fuel deficit in the domestic market, which saw wholesale prices spike in the autumn.
- Domestic Stabilization: Thanks to the measures taken, the situation at gas stations has significantly improved. Gasoline and diesel prices within the country have retreated from September peaks and stabilized under government control. Long-term regulatory mechanisms are also being considered — adjusting the damping mechanism, providing preferential loans to independent gas stations, and changing tax burdens — to avoid new supply disruptions in the future.
- Production and Redirection of Exports: Russian oil production at the end of 2025 is around 9.5 million barrels per day, in line with OPEC+ quotas. Meanwhile, oil exports are being redirected from the European vector to the Asian market: buyers from India, China, and other Asian countries are purchasing Russian oil at a discount to world prices. In the gas sector, pipeline gas exports to Europe have shrunk to their minimum, yet supplies to China via the "Power of Siberia" pipeline have reached unprecedented levels, partially compensating for lost markets.
Sanctions and Policy: Intensifying Western Pressure Amid Attempts at Dialogue
- Long-term Restrictions by the EU: Brussels is solidifying its legislative refusal of Russian energy carriers. On December 4, EU institutions agreed on regulations stipulating that imports of Russian pipeline gas must be completely stopped by November 1, 2027. Concurrently, EU countries aim to accelerate cuts in remaining purchases of Russian oil and oil products, despite potential losses for their refiners.
- G7 Measures: The G7 and allies maintain strict sanctions against the Russian energy sector. A price cap on Russian oil is in place, as well as an embargo on many types of oil products. Financial restrictions complicate transactions and insurance for deals involving Russian oil and gas. Despite some Asian importers continuing to increase their purchases from Russia, circumventing restrictions, the collective West shows no signs of willingness to ease sanctions while the conflict remains unresolved.
- Diplomacy and Negotiations: In the past week, the USA and Ukraine held several rounds of consultations on a peace settlement, developing the framework for a potential agreement. These contacts have generated cautious optimism regarding the prerequisites for initiating a peace process. However, Russia is not participating in these negotiations, and hostilities continue without significant reduction in intensity. There are no real grounds for lifting sanctions or easing geopolitical confrontation at this time.
- Market Risks: The situation remains tense. Attacks on energy infrastructure within the conflict, including strikes on oil terminals, gas facilities, and power grids, increase uncertainty. Any escalation affecting export routes (for example, oil transit through the Black Sea or residual gas supplies through Ukraine) could destabilize markets. Nevertheless, the global energy supply system is demonstrating resilience to local shocks, and market participants are hopeful to avoid direct confrontation between NATO and Russia, which could trigger a global energy shock.
Asia: India and China Strengthening Energy Security
- India's Position: Under Western pressure, New Delhi temporarily reduced purchases of Russian oil in late autumn; however, India remains one of Moscow's largest clients. Indian refineries are actively processing available discounted Urals oil to cover domestic fuel needs. Any excess volumes are being exported by Indian companies, including to European markets, effectively channeling Russian barrels to end consumers after refining.
- China's Strategy: Despite an economic slowdown, Beijing maintains a key role in the global energy market. Chinese importers are diversifying their supply channels: new long-term contracts for LNG procurement have been signed (with Qatar, the USA, and others), and pipeline gas supplies from Russia (volumes via "Power of Siberia" reached record levels this autumn) are increasing. Simultaneously, China is building strategic oil reserves and stimulating domestic production to reduce reliance on external sources.
- Rising Demand: Emerging economies in Asia continue to increase their consumption of energy resources. In 2025, regional demand for oil and natural gas grew, though the pace has somewhat slowed due to last year's high prices and more moderate GDP growth. India is showing a steady increase in fuel usage (gasoline, diesel) as its vehicle fleet and industry expand. China is focusing on the gasification and electrification of its economy, supporting high demand for natural gas and electricity. Both countries' long-term goal is to meet energy consumption without undermining environmental objectives; hence, the capacity of renewable energy sources is also expanding rapidly.
Renewable Energy: Record Investments Backed by Governments
- Record Growth: The year 2025 has become another record year for investments in renewable energy sources. According to analysts' estimates, global investments in "green" energy exceeded $1 trillion, surpassing capital expenditures in fossil fuels. Renewable energy capacity is growing at unprecedented rates: over 300 GW of new solar and wind power plants were commissioned worldwide over the year, exceeding last year's figures.
- Climate Policy: At the COP30 climate summit held in November in Brazil, the global community reaffirmed its commitment to accelerated energy transition. Countries agreed to aim for tripling installed renewable energy capacity by 2030 and set an annual funding target for climate initiatives at $1.3 trillion. Many governments and companies announced new emissions reduction targets and increased shares of clean energy, backing their words with subsidies and tax incentives.
- New Projects: Large-scale projects in clean energy are being implemented everywhere. In Europe, new offshore wind farms have been commissioned. Gigantic solar farms are being built in China and India, and the first hydrogen hubs based on solar and wind energy are launching in the Middle East. The boom in energy storage systems continues: many countries are introducing large battery complexes to smooth out the irregularity of renewable energy generation. Despite economic difficulties, investors maintain high interest in the "green" sector, expecting long-term returns from low-carbon projects.
Coal Sector: High Demand Supports the Market, but the Peak Has Passed
- Asian Demand: China, India, and Southeast Asian countries remain the largest consumers of coal. In 2025, global coal consumption is holding close to historical maximums thanks to these regions, where coal still dominates in electricity generation. Developing economies are reluctant to phase out cheap coal, especially amid rising energy consumption, using it to ensure the baseload of energy systems.
- Signs of a Plateau: Despite high demand volumes, the growth of the coal market is slowing. Analysts note that global coal consumption has likely reached a plateau and will start to decline in the coming years as new renewable energy and gas-fired power plants come online. In several countries, a decrease in coal output is already being recorded: in the USA and Europe, coal-fired power plants are closing, and China is cutting plans for new coal mines and plants in line with declared carbon neutrality goals.
- Prices: Global coal prices have stabilized after sharp rises in 2022. The benchmark index for energy coal (ARA, Europe) is around $95–100 per ton, significantly lower than the peaks of last year. In Asia, prices have also decreased due to improvements in logistics and increased supply from major exporters (Australia, Indonesia, Russia). Significant price spikes are not anticipated unless an extremely cold winter or other unforeseen events occur.
- Pressure from Energy Transition: The coal industry is experiencing increasing pressure from environmental restrictions. International banks and funds are increasingly refusing to finance coal projects, with investors demanding emissions reduction strategies from companies. Even countries heavily reliant on coal are announcing plans to gradually reduce the share of coal generation by the 2030s. All of this indicates that the global "coal peak" is near or has already been passed, and the role of coal will gradually decrease in the long term.
Oil Products and Refineries: Diesel Demand Rises, Gasoline Stagnates
- Distillates on the Rise: Global consumption of distillate fuels — primarily diesel and aviation fuel — continues to increase. Global air travel has almost recovered to pre-crisis volumes, spurring demand for jet fuel. Diesel fuel remains the backbone of transportation and industry: the expansion of logistics, agriculture, and construction in developing countries supports strong demand for diesel. Refineries in many regions are boosting diesel fractions to take advantage of favorable market conditions.
- Gasoline: Gasoline consumption in developed countries has peaked and is starting to decline. Improved fuel efficiency in vehicles, rising sales of hybrid and electric cars, and environmental restrictions in cities are reducing gasoline demand in Europe and North America. In developing economies (Asia, Africa, Latin America), gasoline usage is still rising along with the increasing number of vehicles. Overall, the gasoline market is in a stagnation phase, prompting oil refiners to adapt to the new realities.
- Refining Adaptation: The oil refining industry is adjusting to structural shifts in demand. New high-tech refineries in Asia and the Middle East are focused on producing in-demand products — diesel fuel, jet fuel, and naphtha for petrochemicals. Concurrently, in OECD countries, old facilities that suffer from low margins and tightening environmental regulations are being decommissioned. In 2025, the global crude oil refining volume increased slightly compared to the previous year; however, investments are primarily concentrating in regions with rising demand, while in Europe and the USA, industry capital is shifting toward biofuel and petrochemical production.
Companies and Investments: Industry Consolidation and Project Diversification
- Russian Players: Energy companies in Russia are adapting to sanctions and relying on domestic resources for development. Gazprom Neft plans to issue up to 20 billion rubles in ruble bonds with a floating rate linked to the key rate of the Central Bank to attract financing under closed external capital markets. Rosneft is advancing the mega-project "Vostok Oil" in the Arctic, building infrastructure to develop vast fields in the Taymyr; the project is expected to significantly increase oil production by the end of the decade.
- Majors’ Strategies: Western oil and gas giants (ExxonMobil, Chevron, Shell, BP, and others) maintain expenditure discipline amid low prices. They focus on projects yielding maximum returns and limit the growth of capital expenditures, prioritizing shareholder value — paying stable dividends and conducting share buybacks. Consolidation continues: over the past two years, significant deals have taken place in the USA (ExxonMobil acquired shale company Pioneer Natural Resources, Chevron bought Hess), strengthening the supermajors and their resource base.
- Middle East and New Directions: State companies in the Persian Gulf are actively investing in both traditional oil and gas and new sectors. Saudi Aramco, ADNOC, and QatarEnergy are expanding oil and gas production, building refineries and petrochemical complexes while concurrently funding hydrogen, carbon capture, and renewable energy projects. Oil exporters are therefore diversifying business models in preparation for the gradual transition of the global economy to low-carbon sources. Overall, global investments in oil and gas exploration and production in 2025 showed moderate growth compared to the lows of recent years — reflecting cautious optimism in the industry regarding future demand for hydrocarbons.
