Oil and Gas Energy News - Saturday, December 27, 2025

Current News from 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 - Review and Analysis for Investors and Market Participants

Intensive diplomatic efforts continue to resolve the protracted conflict in Eastern Europe, yet tangible 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 peace agreement. Nonetheless, negotiations have ended the year without breakthroughs, and stringent sanctions on the Russian energy sector remain firmly in place.

The global oil market remains under pressure from an oversupply and moderate demand as the year concludes. Prices for the benchmark Brent crude hover around $62–63 per barrel, close to the lowest levels since 2021, indicating a surplus of crude. The European gas market shows resilience: even at the peak of winter demand, gas storage facilities in the EU are approximately 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 lower than the peaks of 2022, easing the financial burden on consumers.

Meanwhile, the global energy transition is picking up momentum. Many countries are recording new records for electricity generation from renewable sources, although traditional coal and gas power plants still play a crucial role in ensuring grid reliability. Concurrently, a renewed interest in nuclear energy is emerging in several regions as a stable low-carbon energy source that can reduce dependence on fossil fuels.

OPEC+ Adheres to Quotas to Stabilize the Market

At the December meeting, OPEC+ alliance members decided to maintain current oil production quotas for the first quarter of 2026 to prevent 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; however, an overall production cut of approximately 3.2 million barrels per day remains in effect and has been extended until the end of 2026.
The meeting was held against the backdrop of new US attempts to achieve a peace agreement between Russia and Ukraine. OPEC+ members are conscious that the success of negotiations and a potential easing of sanctions could bring additional oil volumes to the market, while a failure would intensify sanctions pressure and further constrain Russia's exports.

Oil Prices Stay Low

Global oil prices are wrapping up 2025 without sharp fluctuations, establishing themselves within a relatively narrow range due to a balance of steady demand and adequate supply.

At the beginning of this week, oil prices increased by approximately 2% amid strong macroeconomic data from the US: GDP growth in Q3 surpassed expectations, bolstering fuel demand projections.
Additional support for prices came from supply disruption risks. New US sanctions on Venezuela's oil sector, as well as strikes on export infrastructure in the Black Sea, heightened market concerns regarding the stability of supplies.
However, by the end of 2025, Brent crude prices had decreased by about 15%. The market exhibited an unusually narrow pricing corridor (~$60–80 per barrel), even amid geopolitical upheaval—largely due to record production levels in the US (over 13.5 million barrels per day) and increased supplies from non-OPEC countries that compensated for localized disruptions.
Refineries ramped up production of oil products, while commercial stocks of crude oil and fuels in the US rose in December. This kept prices stable for gasoline and diesel fuel heading into the year-end, positively impacting consumers.

Natural Gas: Comfortable Stocks and Stable Prices

The natural gas market enters winter relatively calmly. In Europe, even periods of cold weather have not sparked panic, given high reserve levels and supply diversification.

EU underground gas storage facilities are over 70% full as of early January, significantly exceeding long-term averages. This buffer reduces the risk of fuel shortages, even in the event of further cold snaps.
LNG imports remain high, compensating 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) are around $5 per million BTU. Record production levels and high LNG export volumes maintain balance in the American market, although periods of abnormal cold still result in temporary price spikes.

Geopolitics and Sanctions: 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 intensified measures against Venezuela's oil sector: sanctions have been imposed on tankers carrying Venezuelan oil. In December, several vessels were detained and forced to turn back, risking local storage overcapacity and mandatory production cuts.
Amid the ongoing conflict in Ukraine, attacks on energy infrastructure have increased. In November, a Ukrainian drone damaged the Caspian Pipeline Consortium terminal near Novorossiysk, reducing exports of Kazakhstan's CPC Blend oil in December by approximately one-third (to about 1.14 million barrels per day) and forcing the diversion of some volumes away from the Black Sea.
Despite the tightening of US sanctions against major Russian oil companies (Rosneft and Lukoil) in the fall, 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 adaptation of logistics chains, although Urals crude is trading at a significant discount to Brent.
According to Reuters estimates, revenues from oil and gas for the Russian federal budget in December 2025 will amount to approximately 410 billion rubles, nearly half of the previous year's total and close to the minimum levels of recent years (comparable to the disastrous August of 2020). Total oil and gas revenues for 2025 are projected at approximately 8.44 trillion rubles—almost 25% lower than the level in 2024 and below the revised forecast from the Ministry of Finance—highlighting the heavy impact of low prices and sanctions on Russian revenues.
Russia, in turn, does not plan to reduce exports: the pipeline monopoly Transneft stated that oil transport volumes are expected to remain roughly at 2025 levels in 2026. This indicates an intention to maintain stable supplies of Russian oil to the external market, 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 specific political and economic risks.

The UK set a historical record for wind power generation on December 5, producing around 23,825 MW, covering over half of the country's demand at that moment. This milestone was aided 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 are directed towards the construction of solar and wind power plants, as well as energy storage systems to integrate renewables into electricity grids.
In the US, a federal court lifted a previous ban on constructing new wind energy facilities on federal lands and offshore. This decision paves the way for large offshore wind projects and supports the plans of several states to increase their share of clean energy.
China maintains its global leadership in renewable energy: the total installed capacity of renewable energy sources in the country exceeds 1.88 TW (approximately 56% of the total capacity of power plants). The large-scale adoption of solar and wind projects, along with energy storage systems, has allowed China to keep its CO₂ emissions stable, despite economic growth.

Nuclear Power: A Return of Significant Capacity

After a long decline, a revival in the global nuclear sector is emerging. Many countries are reevaluating the role of nuclear generation as a stable source of low-carbon energy amid efforts to reduce dependence on fossil fuels.

Japan is preparing for a phased restart of the largest nuclear power plant, Kashiwazaki-Kariwa. The energy company TEPCO has received approval from Niigata Prefecture authorities and plans to bring unit 6, with a capacity of 1360 MW, online on January 20, 2026—the first reactor to come online since 2011. The complete restoration of the 8.2-gigawatt station will occur gradually over several years.
The Japanese government has announced support measures for the nuclear sector aimed at doubling the share of nuclear generation in the energy mix. A system of government loans and guarantees for the modernization of existing reactors is being introduced; currently, 14 of the 33 reactors, which were shut down after the Fukushima-1 accident, have already 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. The US is considering extending the lifespan of existing units and funding the development of small modular reactors.

Coal Sector: Peak Consumption Before a Decline

The global coal market reached a historical peak in 2025; however, experts anticipate a trend reversal in the coming years. According to the International Energy Agency (IEA), global coal consumption increased by approximately 0.5%, reaching about 8.85 billion tons for the year. A smooth decline in coal demand is projected towards the end of the decade, as renewable energy, nuclear power, and natural gas gradually displace it from the energy mix.

In the US, coal burning at power plants increased in 2025. This was a consequence of last year's spike in gas prices and the administration's directive to extend the operation of certain coal-fired power plants that were previously scheduled for closure.
China remains the largest coal consumer, accounting for about 60% of the country's electricity generation. In 2025, coal demand in China stabilized; a gradual decline is expected by 2030 due to widespread deployment of renewable capacities. Beijing's policy aims to reach peak emissions by 2030, which implies limiting the role of coal in the energy sector.

Oil Products and Refining: High Margins for Refineries

By the end of 2025, the global market for oil products is demonstrating increased profitability for refineries. The decrease in crude prices, combined with steady demand for gasoline, diesel, and jet fuel, has facilitated a rise in refining margins in many regions. Refiners are benefiting from relatively inexpensive raw materials while still enjoying healthy fuel consumption levels.

Global indicative refining margins for oil have surged to their highest levels in recent years. Diesel sales, which continue to see strong demand in the transport sector and industry, are notably more profitable.
Ongoing construction of new refineries in Asia and the Middle East (including major complexes in China and Gulf countries) is increasing global oil refining capacity. However, the simultaneous closure of outdated plants in Europe and North America supports the balance in the oil products market, preventing oversupply and maintaining high margins for operating refineries.
In Russia, authorities have extended the ban on gasoline and diesel fuel exports following a fuel crisis last summer to saturate the domestic market and lower prices. These measures stabilized the situation within the country but simultaneously reduced diesel supply in the global market, also contributing to the sustained high margins for European and Asian refiners.

Corporate News: Deals and Strategies of Energy Companies

The year-end is marked by significant corporate actions in the energy sector, reflecting companies' efforts to optimize asset portfolios and adapt to new market conditions. Major oil and energy corporations are reevaluating strategies, focusing on enhancing the efficiency of traditional businesses while also investing in energy transition and environmentally friendly projects.

BP announced the sale of 65% of its subsidiary Castrol (a lubricant manufacturer) to American investment fund Stonepeak for $6 billion. The deal values the entire Castrol business at $10.1 billion; BP will retain 35% ownership in the new joint venture. The proceeds will be used to reduce debt and pay dividends, aligning with the strategy to boost returns in the traditional oil segment.
Despite sanctions, foreign partners are showing 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 large 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 involved in renewable energy and energy infrastructure projects (including supplying energy to data centers). This move will enable Alphabet to accelerate the development of its own renewable generation and reduce dependence on overloaded electric grids.