Current News in the Oil, Gas, and Energy Sector for Thursday, December 18, 2025: Oil, Gas, Electricity, Renewables, Coal, Refineries, and Key Events in the Global Energy Markets.
Oil and Oil Products
The global oil market remains under pressure: the price of Brent crude is holding near $60 per barrel, while WTI is trading around $55 per barrel — the lowest levels in recent years. The main factors contributing to falling oil prices include:
- Expected supply surplus: For 2026, an excess of production over demand is anticipated, as non-OPEC countries have ramped up production to record levels.
- Hopes for peace in Ukraine: Progress in negotiations between Russia and Ukraine has led to expectations of easing sanctions and the return of a portion of Russian oil exports to the market.
- OPEC+ policy: The OPEC+ alliance, after months of gradually increasing production, has decided to pause in Q1 2026, signaling caution amid the risk of oversupply.
As a result of these factors, oil prices have significantly dropped compared to the beginning of the year. Brent and WTI may finish 2025 at their lowest levels since 2020. The decline in raw material prices has already affected oil product markets: gasoline and diesel have also decreased in price. In the USA, retail gasoline prices have fallen in most states ahead of the holiday season, reducing consumer expenses. European refiners, having switched to alternative oil sources instead of Russian oil, are operating with a stable supply of feedstock. Global refineries are maintaining a high level of processing, benefiting from lower oil prices, although fuel demand is growing at a moderate pace. Refining margins remain stable, and no new gasoline or diesel shortages are observed in the global market.
Gas Market and LNG
A paradoxical situation is unfolding in the gas market: despite an early and cold winter, natural gas prices in Europe continue to decline. The Dutch TTF hub prices have fallen below €30 per megawatt-hour, marking the lowest level since spring 2024. This is nearly 90% lower than the peak values during the 2022 crisis and 45% below prices at the beginning of 2025. The main reason is the avalanche-like influx of LNG, particularly from the USA, which compensates for the reduction of pipeline supplies from Russia. Gas storage in the European Union is filled to about 75%, which, although below average long-term levels, combined with record LNG imports provides sufficient resources for stable prices.
- Europe: High volumes of LNG are lowering gas prices, even with reduced stocks in storage. The USA accounted for more than half of European LNG imports in 2025, redirecting shipments from Asian markets. This has led to a sharp reduction in the spread between European prices and cheaper American gas.
- USA: In North America, conversely, gas futures have risen amid forecasts of abnormal cold. The Henry Hub price rose above $5 per MMBtu due to the threat of polar vortices and increased heating demand. However, domestic production in the USA remains high, keeping price growth in check as weather normalizes.
- Asia: The Asian gas market is relatively balanced as the year ends. Demand in key countries (China, South Korea, Japan) has been moderate, allowing for redirection of additional LNG supplies to Europe. Prices at Asian hubs (e.g., JKM) have remained stable, without sharp fluctuations, as competition for cargo between Europe and Asia has softened compared to 2022.
Thus, the global natural gas market is entering winter with much more confidence than a year ago: stocks and import supplies are sufficient to meet needs even during cold periods. The flexibility of the LNG market plays a crucial role — tankers are swiftly changing direction towards Europe, smoothing regional imbalances. If average temperatures remain, the pricing situation for gas consumers promises to remain favorable.
Coal Sector
The traditional coal segment reached a historic peak in consumption in 2025, but prospects indicate a slowdown is imminent. According to the International Energy Agency (IEA), global coal consumption in 2025 rose by approximately 0.5%, reaching a record 8.85 billion tons. Coal remains the largest source of electricity generation worldwide, but its share is set to decline: the IEA forecasts that coal demand will plateau and gradually decline by 2030 due to the growth of renewable energy and nuclear generation. Regional trends, however, are mixed:
- India: Coal consumption decreased (only the third reduction in the last 50 years) due to an unusually strong monsoon season. Generous rainfall increased hydroelectric generation and cooled demand for electricity from coal-fired power plants.
- USA: In contrast, coal usage increased, fueled by higher natural gas prices in the first half of the year and political support for the sector. The new administration in Washington has suspended the closure of certain coal power plants, temporarily boosting domestic coal demand for electricity.
- China: The world's largest coal consumer has maintained consumption at last year's levels. China burns 30% more coal than the rest of the world combined; however, a gradual decline is expected by the end of the decade as substantial capacities in wind, solar, and nuclear energy come online.
Consequently, 2025 is likely to mark a peak year for coal. Increasing competition from gas (where feasible) and especially from renewable sources will displace coal from the energy mix of many countries. Nevertheless, in the short term, coal remains in demand in developing Asian economies, where the growth in energy consumption currently outpaces the construction of new clean capacities.
Electricity and Renewable Energy
The electricity sector continues to transform under the influence of climate agendas and fuel price volatility. In 2025, the share of renewable energy sources (RES) in global electricity generation reached new heights: many countries introduced record capacities of solar and wind power plants. For example, China has been aggressively increasing solar generation, while Europe and the USA have introduced new offshore wind farms and photovoltaic projects, incentivized by government support and private investments. By the end of the year, global investments in green energy remain high, approaching investments in fossil fuels.
However, the rapid development of RES poses the challenge of ensuring the stability of energy systems. This winter in Europe has shown the factor of weather variability: periods of weak winds and short daylight hours have increased the load on traditional generation. At the beginning of winter, EU countries had to increase gas and coal generation due to low output from wind farms amid anti-cyclonic conditions. This temporarily raised electricity prices in certain regions. Nevertheless, thanks to the rise in RES capacities combined with a high share of gas in the mix, significant energy supply issues have not emerged. Governments and energy companies are also investing in energy storage systems and grid modernization to smooth peaks and integrate renewable energy.
Climate commitments continue to dictate the trend: at the recent global climate summit (COP30) in Brazil, calls to accelerate the energy transition were prominent. A number of countries agreed on measures to triple the deployment of RES by 2030 and improve energy efficiency. There is also a resurgence of interest in nuclear energy: new nuclear power plants are being built in various regions, and the lifespan of existing ones is being extended to ensure baseload generation without emissions. Overall, the electricity sector is moving towards a cleaner and more sustainable future, although the transition period requires balancing reliability of supply and environmental goals.
Geopolitics and Sanctions
Geopolitical factors continue to exert a strong influence on energy markets. The focus is on the conflict in Eastern Europe and associated sanctions:
- Peace negotiations: In December, the most significant progress in dialogue toward resolving the situation in Ukraine has emerged since the beginning of the conflict. The USA has expressed readiness to provide Ukraine with security guarantees similar to those of NATO, while European diplomats reported constructive discussions. Expectations of a possible ceasefire have intensified, although Russia states it will not make territorial concessions. Growing hopes for an end to hostilities have sparked discussions about the potential lifting or softening of oil and gas sanctions against Russia in the future.
- Pressure of sanctions: Simultaneously, Western countries are signaling their readiness to intensify pressure if the peace dialogue reaches a stalemate. Washington, in particular, has prepared another package of sanctions against Russia's energy sector, which could be implemented if Moscow rejects the proposed terms of the peace agreement. Earlier this fall, the USA and the UK had already imposed additional restrictions on Russian oil giants "Rosneft" and "Lukoil," complicating their ability to attract investments and technology.
- Infrastructure risks: Combat operations and sabotage continue to pose threats to energy supply. Over the past week, the Ukrainian side has intensified drone attacks on oil infrastructure facilities deep within Russia. Specifically, there were fires at refineries in Krasnodar Krai and on the Volga due to drone strikes. Although these incidents have a locally insignificant impact on the overall fuel supply, they underscore the continued military risks to the industry until a durable peace is achieved.
- Venezuela: In Latin America, geopolitics also plays a role in oil markets. After partial easing of sanctions against Venezuela in the fall, the United States has tightened oversight of compliance with the terms of the deal. In December, an incident occurred involving the detention of a tanker transporting Venezuelan oil due to suspected violations of licensing terms. The state company PDVSA faced demands from clients to increase discounts and change supply conditions. This complicated Venezuela's export growth, despite the recent permission from the USA to temporarily increase output in exchange for political concessions from Caracas.
Overall, the sanctions standoff between Russia and the West, along with other international disagreements, continues to add uncertainty to the global FEC. Investors are closely monitoring news from the political fronts, as any changes — from breakthroughs in peace negotiations to the imposition of new restrictions — can significantly impact oil, gas, and other commodity prices.
Corporate News and Projects
Major oil and gas companies and energy projects around the world are concluding the year with a number of important events and decisions:
- Shell exits German refinery: British-Dutch company Shell has resumed attempts to sell its 37.5% stake in the Schwedt refinery in Germany. This refinery was previously controlled by "Rosneft" and has come under the management of the German government since 2022. Shell is seeking a buyer by the end of January, aiming to fully distance itself from an asset linked to sanction risks.
- Middle Eastern expansion: In Kuwait, the oil and gas service company Action Energy (AEC) successfully conducted an initial public offering on the local stock exchange and announced plans for regional expansion. The raised funds will be directed towards expanding drilling and field service operations both in Kuwait and neighboring countries where oil and gas production is increasing. This move reflects the strengthening of Middle Eastern businesses amid rising oil output in the region.
- New gas deals in Europe: European buyers are continuing to diversify gas supplies. The Hungarian state conglomerate MVM has signed a 5-year contract with American Chevron for the delivery of liquefied gas amounting to about 2 billion m3 per year. This LNG will be delivered through terminals in Europe, reducing Hungary's dependence on pipeline gas and enhancing the country's energy security. The deal illustrates the deepening of cooperation between the USA and Eastern Europe in the gas market.
Overall, oil and gas companies are adapting to the new market reality: some are reassessing assets and portfolios considering geopolitical risks (as Shell is in Europe), while others are leveraging favorable conditions for growth (as Middle Eastern players are doing). At the same time, investments continue in both traditional oil and gas projects as well as in energy transition pathways. Industry giants are required to balance short-term profitability with long-term decarbonization trends, which determines key strategic decisions in the FEC as we approach 2026.
