Current News in the Oil, Gas, and Energy Sector for Saturday, December 27, 2025: Oil, Gas, Electricity, Renewable Energy, Coal, Oil Products, and Key Trends in the Global Energy Sector — Overview and Analysis for Investors and Market Participants.
Intensive diplomatic efforts to resolve the protracted conflict in Eastern Europe continue, but specific results remain elusive. The US and European allies have offered Kyiv unprecedented security guarantees in exchange for a ceasefire, instilling cautious optimism regarding the potential for a peaceful agreement. However, negotiations concluded the year without a breakthrough, and the stringent sanctions regime against the Russian energy sector remains fully intact.
The global oil market is ending the year under pressure from oversupply and moderate demand. Benchmark Brent crude prices hover around $62–63 per barrel, approaching the lowest levels since 2021, indicating a developing surplus. The European gas market displays resilience: even at the peak of winter demand, underground gas storage in the EU is filled to about two-thirds capacity, virtually eliminating the risk of shortages. Steady liquefied natural gas (LNG) supplies, along with alternative pipeline fuel, keep wholesale prices moderate, significantly lower than the peaks of 2022, alleviating the expense burden for consumers.
Meanwhile, the global energy transition is gaining momentum. Many countries are setting new records for electricity generation from renewable sources, although traditional coal and gas-fired power plants still play a vital role in ensuring the reliability of energy systems. Concurrently, there is a renewed interest in nuclear energy 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 its December meeting, OPEC+ members 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 approximately 2.9 million barrels per day to the market from previously reduced volumes; however, the total production cap of about 3.2 million barrels per day remains in place and has been extended until the end of 2026.
- The meeting took place against the backdrop of a renewed attempt by the US to achieve a peace agreement between Russia and Ukraine. OPEC+ considers that the success of the negotiations and a potential easing of sanctions could bring additional oil volumes to the market, while a failure would intensify sanctions pressure and further restrict Russian exports.
Oil Prices Remain Low
Global oil prices are concluding 2025 without sharp fluctuations, remaining within a relatively narrow range thanks to a balance of steady demand and sufficient supply.
- Earlier this week, oil prices rose by approximately 2% amid strong macroeconomic data from the US: GDP growth in Q3 exceeded expectations, bolstering fuel demand forecasts.
- Additional support for prices has come from supply disruption risks. New US sanctions against Venezuela's oil sector, along with strikes on export infrastructure in the Black Sea, have heightened market concerns regarding the stability of supplies.
- However, Brent crude has decreased by about 15% by the end of 2025. The market exhibited an unusually narrow price corridor (~$60–80 per barrel) even amidst geopolitical upheavals, largely thanks to record production in the US (over 13.5 million barrels per day) and increased supplies from non-OPEC countries that compensated for local disruptions.
- Refineries ramped up production of oil products, while commercial stocks of crude oil and fuel in the US increased in December. This prevented sharp price spikes for gasoline and diesel fuel at year-end, positively impacting consumers.
Natural Gas: Comfortable Stocks and Stable Prices
The natural gas market is entering winter relatively calmly. In Europe, even periods of cold weather have not triggered panic, given high reserve levels and supply diversification.
- EU underground gas storage was filled to over 70% by early January, significantly above multi-year averages. This buffer reduces the risk of fuel shortages even in the event of further cold temperatures.
- LNG imports remain high, allowing compensation for the cessation of pipeline supplies from Russia. Major European consumers (Germany, Italy, etc.) are actively purchasing liquefied gas on the spot market, diversifying their energy supply sources.
- In the US, natural gas prices (Henry Hub) remain around $5 per million BTU. A record level of production and high LNG export volumes maintain balance in the American market, although periods of anomalous cold still lead to brief price spikes.
Geopolitics and Sanctions: The Impact on Energy Supplies
Political conflicts and sanctions continue to significantly influence global energy markets, simultaneously creating threats of disruptions and hopes for improvements in the future.
- The US administration has tightened measures against the Venezuelan oil sector: sanctions have targeted tankers transporting Venezuelan oil. In December, several vessels were detained and forced to turn back, which threatens to overflow local storage and compel production cuts in the country.
- Amid the ongoing conflict in Ukraine, attacks on energy infrastructure have increased. In November, a Ukrainian drone damaged the CPC terminal near Novorossiysk, reducing Kazakhstan's CPC Blend oil exports by about a third in December (to ~1.14 million barrels per day) and forcing rerouting of some volumes away from the Black Sea.
- Despite the tightening of US sanctions against major Russian oil companies ("Rosneft" and "LUKOIL") in autumn, the direct impact of these measures on the global market has been limited. Russian oil exports remain close to multi-month highs due to the restructuring of logistics chains, although Urals is traded at a significantly larger discount to Brent.
- According to Reuters estimates, oil and gas revenues in the Russian federal budget in December 2025 are projected to be around 410 billion rubles, nearly half of the previous year, and close to the lowest levels in recent years (comparable to the disastrous August 2020). Total revenues from oil and gas for 2025 are estimated at approximately 8.44 trillion rubles—almost 25% lower than in 2024 and below the revised forecast of the Ministry of Finance—highlighting the severity of the impacts of low prices and sanctions on Russia's income.
- Russia, for its part, does not plan to decrease exports: the pipeline monopoly "Transneft" stated that oil pumping volumes in 2026 will remain roughly at the level of 2025. This indicates an intention to maintain stable supplies of Russian oil to foreign markets despite sanctions pressure.
Renewable Energy: Records and Investments
The green energy sector continues to experience rapid growth, setting new records for capacity additions and capital investment despite certain political and economic risks.
- The UK recorded a historical peak in wind electricity generation on December 5, reaching about 23,825 MW, covering more than half of the country's needs at that time. Strong winter winds and the expansion of offshore wind farms contributed to this record.
- According to BloombergNEF, global investments in new renewable energy projects reached a record $386 billion in the first half of 2025. The majority of the funds are directed towards building solar and wind power plants, as well as energy storage systems to integrate renewables into power grids.
- In the US, a federal court overturned a ban that had previously been in place this year on the construction of new wind energy projects on federal lands and offshore. This decision clears the way for the development of large offshore wind farms and supports several states' plans to increase the share of clean energy.
- China continues to lead the world in renewable energy: the total installed capacity of renewable energy sources in the country exceeds 1.88 TW (about 56% of the total power plant capacity). The large-scale rollout of solar and wind facilities, as well as energy storage systems, has allowed China to keep CO2 emissions stable despite economic growth.
Nuclear Energy: The Return of Large Capacity
After a prolonged decline, the global nuclear industry is showing signs of revival. Many countries are reassessing the role of nuclear generation as a stable source of low-carbon energy in the context of efforts to reduce dependence on fossil fuels.
- Japan is preparing for the phased restart of the largest nuclear power plant, Kashiwazaki-Kariwa. The energy company TEPCO has received approval from the Niigata prefecture authorities and plans to launch unit No. 6 with a capacity of 1,360 MW on January 20, 2026—the first reactor commissioned by the company since 2011. The full restoration of the 8.2-gigawatt station will occur gradually and take several years.
- The Japanese government has announced measures to support the nuclear industry to double the share of nuclear generation in the energy balance. A system of government loans and guarantees for the modernization of existing reactors is being introduced; currently, 14 of the 33 reactors shut down after the Fukushima-1 accident have resumed operation.
- A return to nuclear energy is also observed in other countries. In Europe, Finland has commissioned the new Olkiluoto-3 reactor, while France and the UK are investing in the construction of modern nuclear power plants, and in the US, an extension of the operational life of existing units and funding for the development of small modular reactors are under consideration.
Coal Sector: Peak Consumption Before Decline
The global coal market reached a historic peak in 2025, yet experts anticipate a trend reversal in the coming years. According to the International Energy Agency (IEA), global coal consumption increased by about 0.5%, reaching approximately 8.85 billion tons for the year. By the end of the decade, a gradual decline in coal demand is expected as renewable energy, nuclear, and natural gas gradually displace it from the power sector.
- In the US, coal consumption at power plants increased in 2025. This was a consequence of last year's spike in gas prices and an order from the administration to extend the operation of some coal-fired power plants that were previously scheduled for closure.
- China remains the largest consumer of coal, accounting for about 60% of the country's electricity production. In 2025, coal demand in China stabilized; a gradual decline is expected by 2030 due to the large-scale introduction of renewable capacity. Beijing's policy aims to achieve peak emissions by 2030, which implies a reduction in coal's role in energy generation.
Oil Products and Refining: High Margins for Refineries
By the end of 2025, the global oil products market is demonstrating increased profitability for refineries. A decline in oil prices combined with sustained demand for gasoline, diesel, and jet fuel has driven margins up in many regions. Refiners are benefiting from relatively cheap raw materials at a still healthy level of fuel consumption.
- Global indicative refining margins have surged to their highest levels in recent years. Particularly high profitability is seen in diesel fuel sales, with strong demand persisting in the transportation sector and industry.
- The active construction of new refineries in Asia and the Middle East (including major facilities in China and the Gulf countries) is increasing global oil refining capacity. However, simultaneous closures of outdated plants in Europe and North America maintain balance in the oil products market, preventing market oversaturation and sustaining high margins for existing refineries.
- In Russia, authorities extended the ban on diesel and gasoline exports following the fuel crisis in the summer, aiming to saturate the domestic market and reduce prices. These measures stabilized the situation domestically but simultaneously reduced diesel availability on the global market, contributing to maintaining 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' intentions to optimize their asset portfolios and adapt to new market conditions. Major oil and energy corporations are revising strategies, focusing on enhancing the efficiency of traditional businesses while investing in energy transition and environmentally friendly 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, with BP retaining 35% of shares in the new joint venture. The proceeds will be directed toward debt reduction and dividend payouts, aligning with the strategy to enhance returns in the traditional oil segment.
- Despite sanctions, foreign partners show interest in Russian oil and gas projects. In particular, Indian ONGC and Japanese SODECO have retained their stakes in the Sakhalin-1 project, and a preliminary agreement between ExxonMobil and Rosneft regarding compensation for past losses signals the willingness of major players to resume collaboration once the political situation normalizes.
- The convergence of the technology and energy sectors continues. For instance, American tech giant Alphabet (parent company of Google) announced in December the acquisition of Intersect Power for $4.7 billion, a company implementing projects in renewable energy and energy infrastructure (including data center power supply). This move will allow Alphabet to accelerate the development of its own renewable generation and reduce its data centers' dependence on overloaded electric grids.
