Current News in the Oil, Gas, and Energy Sector for Wednesday, December 31, 2025: Global Oil and Gas Market, LNG, Renewable Energy, Electricity Generation, Coal, Refineries, and Key Trends for Investors and Energy Sector Participants.
As of the end of 2025, the state of the fuel and energy complex is characterized by oversupply of oil and gas, keeping prices at minimal levels. For instance, Brent crude is trading around $60 per barrel, while retail gasoline prices in the U.S. have dropped below $3 per gallon, reaching a level not seen since 2021. In Europe, gas storage facilities are almost 90% full, which keeps prices for the "blue fuel" moderate even with the arrival of cold weather. Simultaneously, the global energy transition is gaining momentum: renewable energy sources (RES) are breaking generation records, and many countries are increasing capacities in wind, solar, and other clean technologies. We present an overview of key news in the commodity and energy sectors that are influencing global markets.
Global Oil Market: Oversupply and Stable Prices
The global oil market is entering a new "supply race." Following its autumn meetings, OPEC+ agreed to suspend production increases at the beginning of 2026; however, total supplies remain high. Saudi Aramco has been reducing official sales prices for oil in the Asian market for several months, reflecting the excess of raw materials. American shale producers have shown an unprecedented production increase of 25% in 2025, with Brazil and Canada also reaching record output levels. At the same time, China has increased its oil purchase program for 2026, while demand across most major markets remains subdued due to economic slowdowns. Cumulatively, these factors are restraining price growth: Brent remains around $60–65 per barrel, and WTI is holding around $58–62.
- Oil prices remain relatively stable. Brent trades around $62, WTI around $58–60, which is 10–15% lower than a year ago. The restraining factor is the "oversupply" in the context of slowing demand.
- OPEC+ has decided to suspend quotas increase for the first half of 2026. The group continues to maintain total production cuts of around 3.2 million barrels per day (approximately 3% of global demand).
- Saudi Aramco has once again lowered the selling prices of its oil for Asian customers for February, bringing the Arab Light premium down to a five-year low of about $0.40 over average Oman/Dubai prices.
- Venezuela continues to face difficulties. Due to U.S. sanctions, crude oil exports in December fell by about half compared to November. However, PDVSA is expanding the use of tankers for floating storage and deliveries to China as part of debt repayment.
- Chevron's new oil and gas project off the coast of Angola saw its first oil production in 2025, with plans to achieve around 25,000 barrels per day of oil and 50 million cubic feet per day of gas at the South N'Dola field at peak development.
Gas Sector and LNG: Record Deliveries and Price Pressure
2025 has been a milestone year for the gas market, seeing new record levels of LNG (liquefied natural gas) exports. Leading exporters, primarily the U.S. and Canada, have significantly ramped up shipments. In November, the U.S. exported over 10.9 million tons of LNG—marking the third consecutive record month—primarily due to cold weather along the coast and high utilization rates at Cheniere and Venture Global facilities. By year's end, global LNG supplies increased by approximately 4%, exceeding 425 million tons, representing substantial growth for the first time since 2022. This growth is partly associated with the commissioning of new terminals in the U.S., Canada, and Qatar. However, competition in the market is intensifying: new export capacities are expected to increase by about 50% by 2030, which could lead to temporary oversupply and price reductions. Europe remains a key market, with November receiving up to 70% of American LNG. Meanwhile, demand in Asia has slowed—Asian JKM prices hover around $11–12 per MMBtu. As a result of moderate temperatures and ample natural gas reserves, European TTF quotes were around $10 per MMBtu at year’s end.
- LNG exports have reached record levels. The U.S. averaged exports of around 15 billion cubic feet per day in 2025 (+25% from 2024), supplying most of the gas to Europe. Canada has begun regular LNG shipments for the first time from the new LNG Canada terminal.
- Gas prices are rising moderately. In the U.S., the Henry Hub average price was about $4.5/MMBtu at the end of November (up from $3.4 in October) due to increased LNG demand. Europe and Asia are holding above $10/MMBtu but are lower than peak levels seen during winter 2022-2023. The surplus of supply from the U.S. is smoothing out sharp price fluctuations.
- New infrastructure projects. The U.S. plans to invest over $50 billion in pipeline construction by 2030 to meet growing internal and external demand. Major Asian LNG projects (Qatar, Australia) are set to come online, and discussions are ongoing about expanding pipelines from East Africa.
- Regional specificities. China, in 2026, has received quotas for oil and gas imports with an increase of about 8% from last year, maintaining its demand. India is, in turn, reducing its import dependency, actively seeking to develop local gas production and gain compensations from foreign companies for undelivered oil.
Coal Sector: Record Demand and Long-Term Decline
Despite the rapid development of "clean" technologies, global demand for coal in 2025 also reached record levels, driven by several factors. According to the IEA, global coal demand grew by about 0.5% to 8.85 billion tons—primarily due to the cold winter and increased consumption in power plants. In China, the largest consumer, overall coal consumption remained stable, although a decline is expected moving forward as RES are scaled up. India reduced coal consumption for the first time in five years due to heavy rains and increased hydropower output. In the U.S., coal consumption saw an uptick as high gas prices and government measures (prolonging coal-fired plants) supported demand. However, long-term trends point definitively toward a decline: by 2030, coal's share in the energy balance is expected to significantly decrease due to the influence of renewable sources, gas, and nuclear energy.
- Consumption growth. According to the International Energy Agency, global coal demand hit a new record (8.85 billion tons). The highest growth was reported in CIS countries and the U.S. (primarily due to high gas prices), despite declines in India and stagnation in China.
- India and China. In 2025, India reduced both coal imports and consumption due to record precipitation and successful hydropower projects. In China, despite the scaling up of RES, coal still comprises over 50% of generation; however, Beijing plans a gradual reduction in coal's share by 2030 as RES and nuclear energy are scaled up.
- Long-term trend. IEA experts note that under the influence of decarbonization policies and economic factors, coal demand has peaked and will begin to gradually decline in the second half of the decade. Previously stated environmental targets are incentivizing the conversion of coal-fired plants to gas and the installation of additional solar and wind stations.
Electric Power and RES: Record Growth in Renewables and New Challenges
In 2025-2026, a historical pivot was noticed: total electricity generation from RES for the first time surpassed coal's share in the global energy balance. The 2-3% growth in electricity consumption in 2025 was wholly accounted for by increased generation from wind and solar capacities (growth of over 30% and 8% respectively), while coal generation declined. The global share of RES in generation exceeded 34%, while coal decreased to approximately 33%. Simultaneously, hydro and nuclear power capacities are growing: by the end of 2026, cumulative nuclear generation is expected to be record high (mainly due to new reactors in China, India, and Korea). According to IEA reports, by 2030, about 80% of new growth in renewables will come from solar energy, which requires extraordinary investments in grids and storage to smooth variability. Many countries have already announced large-scale projects: for example, Indonesia plans to increase installed RES capacity by 30% in the next five years, while the EU is expanding funding for electrical grids and data centers reliant on RES.
- New RES records. According to industry agencies, just in the first half of 2025, solar and wind installations added over 300 TWh to global generation. This roughly corresponds to the annual electricity consumption of a country like Italy. The transition to RES mitigates the pace of demand growth but necessitates network modernization.
- Investment in grids and flexibility. The rising share of RES presents balancing challenges for the energy sector: energy storage (batteries, hydrogen), dense networks, and controllable generation sources are necessary. International institutions urge governments to accelerate the construction of "smart grids" and substations, as well as implement demand management systems.
- Hydro and nuclear. While RES lead, hydropower remains a vital backup—especially in Asia. Nuclear generation is also accelerating: new reactors are being introduced in 2025-2026 in China, India, and the UAE, which will aid in reducing coal reliance in the region.
International Geopolitics: Conflicts and Sanctions
Global political events remain a significant driver for energy prices. The escalation of conflict in Yemen (involving the UAE and Saudi Arabia) has added uncertainty: threats of explosions at the Red Sea Block and supply disruptions raise the risk premium. At the same time, negotiations to end the war in Ukraine are making little progress, and a December revision in positions by Russian leadership stirred concerns over future gas flows. Against this backdrop, oil prices are maintained above August levels despite the market "oversupply." Sanctions also play a crucial role: the U.S. has continued its blockade on Venezuelan oil supplies, reducing PDVSA's exports by about half in December. Nonetheless, some sanctioned tankers are heading toward Venezuela's shores as Maduro repays debts to China in oil. Additionally, Russia has extended its ban on gasoline and diesel exports until February 2026 due to energy deficit risks.
- The Yemen conflict. Following tense clashes in December, the UAE announced a military withdrawal, but the situation remains tense. The military crisis adds anxiety to oil markets as it potentially threatens major supply routes through the Red Sea.
- Russia-Ukraine. Negotiations to end the war have stalled: Russia speaks of “revising” its approach, while Ukrainian leadership refuses to concede. This maintains risks for gas supplies (via Gazprom) and oil (considering potential changes in sanctions).
- Venezuela blockade. The U.S. has intensified pressure on Venezuelan oil exports: a tanker blockade has been imposed. PDVSA's exports fell by approximately 50% in December. However, a portion of oil continues to be directed to China via barter schemes. Maduro is negotiating with consumer countries, offering significant discounts to avoid complete sales halts.
- The Middle East and Iran. Tensions surrounding Iran's nuclear program remain one of the volatility factors. Informal signals regarding the resumption of Iranian gas and oil exports could affect regional supply balances by mid-2026.
Refining and Oil Products: Margins and New Trends
The growing global surplus of crude oil does not automatically imply cheaper fuel products. Diesel prices remain high due to structural supply constraints: European refiners are cutting back on processing Russian oil under sanctions pressure, and drone attacks on Russian oil fields further enhance diesel shortages. As a result, the margin on the European diesel market has grown by about 30% in 2025, despite falling raw material costs. In the U.S., gasoline prices traditionally decrease during the Christmas period: at the beginning of December, retail prices fell to 2021 levels (about $2.9/gallon). In Asia, major fuel importers confirm moderate consumption growth. In response, European refiners are pivoting towards the production of biofuels and sustainable aviation fuels (SAF) to diversify their business. Several countries are also discussing the introduction of new standards for the environmental components of fuel, which stimulates the modernization of refineries.
- Diesel margin growth. Due to reduced exports from Russia and limited replenishment of stocks in Europe, diesel prices in November-December exceeded those of crude oil counterparts. Demand for diesel is expected to remain strong in 2026 (construction, agriculture), supporting margins to an average of $10-15/barrel.
- The Euro depreciates. As fuel prices fall in Asian markets, European traders anticipate declining gasoline and jet fuel prices. Reports indicate that in December, gasoline futures in Amsterdam fell 15% below November levels. This provides a short-term respite for consumers.
- Shift to SAF and biofuels. Under pressure from the EU and the U.S., refiners are beginning to construct facilities for producing biodiesel and SAF. Subsidy programs in the aviation industry are stimulating growth in demand: for instance, in Europe, total SAF production is expected to reach 3 million tons by 2026.
- Stabilization in the domestic fuel market. Emergency measures have been adopted in several countries. For example, Russia, which saw a sharp rise in gasoline prices in the first half of the year, extended its export ban on fuel. In the U.S., on the contrary, drilling activity has increased – companies are expanding the number of wells to take advantage of low oil prices.
Major Projects and Investments: Deals and Future Ambitions
Despite short-term challenges, oil and gas companies are preparing for long-term growth. Several landmark agreements were concluded in 2025. Woodside Energy signed a long-term contract for the supply of approximately 5.8 billion cubic meters of LNG from new U.S. projects (Louisiana) with deliveries starting in 2030. International oil companies continue to implement large-scale developments: for instance, Saudi Aramco and the UAE plan to increase investments in traditional oil production in 2026-2030 after a pause. In the Asian direction, Shell and partners in Canada are facing difficulties in launching the LNG Canada facility: both lines were idle for several weeks in December due to technical failures. The Sakhalin-1 field in Russia remains in focus: the government extended the deadline for the sale of a 30% stake in ExxonMobil until the end of 2026, giving a chance for foreign company integration after sanctions conclude.
- Major LNG deals. In the U.S., multiple 10-15 year contracts for LNG supplies to Asia and Europe were announced. Besides Woodside, similar agreements were joined by Kazakhstan's Tengiz (field expansion project) and Russian projects (Lakhta LNG, Arctic LNG).
- New oil and gas projects. Chevron began production at a field off the coast of Angola (first oil appeared in the summer of 2025), while Italy's Eni is considering similar steps in Mozambique and Nigeria. Development ministries in BRICS countries announced plans to increase oil production in aging fields through Enhanced Oil Recovery technologies.
- Investments in RES. Among the strategies of large companies is diversification. For instance, Swedish Vattenfall is seeking government funding to construct new nuclear reactors as part of a "green" strategy; Chinese CATL is investing in European battery manufacturing plants. In Asia, the number of joint ventures in renewable energy is growing.
- Preparing for 2026. Many research organizations and financial players expect that in 2026 the reserves of oil and gas will continue to rise, necessitating a throttle back. Experts predict a potential decrease in Western companies’ capital expenditures by 10-15% in 2026 – but with an emphasis on new technologies (E&P in Arctic, deepwater) and the digitalization of extraction operations.
