Energy Sector News for Sunday, December 7, 2025: Oil and Gas Prices, OPEC+ Decisions, Sanctions Pressure on the Russian Energy Sector, Fuel Situation in Russia, the Role of the EU, USA, China, and India, Trends in the Coal Market, Renewable Energy, and Oil Products — Analytical Review for Investors and Global Energy Sector Participants.
Key events in the global energy sector leading up to December 7, 2025, demonstrate that global markets continue to balance between an oversupply of resources and geopolitical risks. Oil prices remain near their lowest levels in two years: Brent crude is trading at around $62–64 per barrel, while American WTI hovers around $59. These levels are significantly lower than mid-year figures, as the market is pressured by increased supply amidst relatively stable demand and cautious optimism regarding potential progress in peace negotiations over Ukraine. The European gas market enters winter showing no signs of scarcity; underground gas storage in the EU remains approximately 75–80% full, and wholesale prices (TTF hub) are maintained around €28–30 per MWh, significantly lower than the extreme peaks of previous years. Record liquefied natural gas (LNG) supplies and mild weather at the start of the season provide stability and relatively low gas prices.
Meanwhile, geopolitical tensions surrounding energy markets remain. Western countries maintain sanctions pressure on the Russian oil and gas sector: the European Union is legally formalizing a complete ban on the import of Russian pipeline gas by 2027 and is striving to accelerate the reduction of oil purchases from Russia. Diplomatic efforts to achieve a breakthrough in resolving the conflict have not yielded tangible results so far, although the USA and Ukraine conducted consultations regarding a peace plan in early December. Energy supplies remain under threat 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 after a fall fuel shortage — oil product exports remain severely restricted to saturate the domestic market. Simultaneously, the global energy sector is accelerating its "green" transition: investments in renewable energy sources are reaching new records, while leading economies are announcing ambitious plans to reduce dependency on fossil resources.
Oil Market: Prices at Two-Year Lows Due to Oversupply and Hopes for Peace
- Global Supply: The global oil market remains oversaturated. OPEC+ countries and other producers collectively extract more oil than the market consumes at the current level of demand. 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 last meeting, leading OPEC+ participants agreed to maintain production quotas for Q1 2026 at December 2025 levels, effectively extending current restrictions. If necessary, the coalition is ready to adjust production promptly: a spare capacity of about 1.65 million barrels per day could gradually return to the market based on conditions.
- US Production at a Max: Oil production in the United States is near record levels. Despite a reduction in the number of active rigs, technological efficiency enabled the extraction to exceed 11 million barrels per day in continental states by mid-2025. High production levels in the US add substantial volumes to the market, offsetting some of OPEC+ cuts.
- Local Disruptions: Recent incidents have only temporarily affected exports. In early December, Ukrainian drones damaged one of the terminals in the Black Sea through which Kazakh oil is exported, but shipments rapidly resumed through a backup terminal. Additionally, the largest oil terminals in Libya were temporarily closed from December 5-6 due to a storm. These events did not cause price spikes — the market is able to absorb short-term stoppages given the current balance of supply and demand.
- Price Benchmarks: Brent crude is holding in a narrow range of $62–64 per barrel (more than 20% lower than early autumn levels). Investors expect prices to remain restrained in the near term; a sharp recovery in demand is not anticipated, and easing monetary policy in the US only moderately supports commodity markets. At the same time, any new geopolitical shock (escalation of conflict or significant production disruptions) could lead to 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 is approximately 75% full. Inventories are gradually declining with the onset of colder weather, but still significantly exceed average levels for this period. The created buffer sharply reduces the risk of gas shortages in mid-winter.
- Record LNG Imports: Liquefied natural gas supplies to Europe remain at historically high levels. Weakening demand for LNG in Asia has released additional volumes for the European market, partially compensating for the cessation of pipeline supplies from Russia. The USA particularly stands out, having increased its LNG exports and becoming a key external gas supplier to the EU against the backdrop of rising demand.
- Diversification of Sources: European countries are strengthening energy security through alternative suppliers. Purchases of gas from Norway, Algeria, Qatar, Nigeria, and other regions have been increased. New infrastructure — from LNG terminals to international interconnectors — is operating at maximum capacity, ensuring a stable inflow of fuel from various parts of the world.
- Low Prices: Wholesale gas prices in the EU are currently an order of magnitude lower than peak values of 2022. The Dutch TTF index stays below €30 per MWh (about $330 per 1,000 cubic meters) and has continued a gradual decline for the third consecutive week. Despite seasonal upticks in demand and episodic decreases in renewable energy generation, the market remains balanced due to ample supplies. Significant price spikes have been avoided so far.
Russian Market: Fuel Shortages and Extension of Export Restrictions
- Gasoline Export Ban: The Russian government implemented a temporary blanket ban on exports of automotive gasoline by all producers and traders (except for minimal shipments under intergovernmental agreements) back in late August. Initially intended to last until October, the fall fuel crisis forced an extension of this measure: effectively, the ban remains in place until the end of the year to maximize gasoline supply to the domestic market.
- Diesel Restrictions: Simultaneously, the export ban on diesel fuel for independent traders has been extended until the end of 2025. Oil companies with their own refineries are permitted limited diesel exports to prevent processing from stalling due to tank overflow. These measures aim to prevent a recurrence of fuel shortages in the domestic market, which triggered a spike in wholesale prices during the fall.
- Domestic Stabilization: Thanks to the measures taken, the situation at gas stations has noticeably improved. Prices for gasoline and diesel fuel within the country have retreated from the September peaks and stabilized under government control. Long-term regulatory mechanisms are also being considered — adjusting the damping mechanism, preferential lending for independent gas stations, and altering tax burdens — to avoid new supply disruptions in the future.
- Production and Redirection of Exports: Russian oil production at the end of 2025 stands at around 9.5 million barrels per day, consistent with OPEC+ quotas. However, oil exports have shifted from the European direction to Asia: buyers from India, China, and other Asian countries are purchasing Russian oil at a discount to global prices. In the gas sector, pipeline gas exports to Europe have diminished to minimum levels; however, exports to China via the "Power of Siberia" pipeline have reached unprecedented levels, partially compensating for lost markets.
Sanctions and Policy: Intensified Pressure from the West Amid Dialog Attempts
- Long-Term EU Restrictions: Brussels is consolidating a legislative refusal of Russian energy resources. On December 4, EU institutions agreed on regulations stipulating that imports of Russian pipeline gas must be completely terminated by November 1, 2027. Concurrently, EU countries intend to accelerate the reduction of remaining purchases of Russian oil and oil products, despite potential costs to their refiners.
- G7 Measures: The Group of Seven and its allies continue to impose stringent sanctions on the Russian energy sector. A price cap on Russian oil is in effect, along with an embargo on various types of oil products. Financial restrictions complicate payments and insurance for transactions involving Russian oil and gas. Although some Asian importers are still increasing their purchases from Russia, circumventing restrictions, the collective West is sending no signals of willingness to ease the sanctions regime until the conflict is resolved.
- Diplomacy and Negotiations: In the past week, the USA and Ukraine conducted several rounds of consultations on a peace settlement, developing a framework for a potential agreement. These contacts have generated cautious optimism regarding the prerequisites for the start of a peace process. However, Russia is not participating in these negotiations, and the hostilities continue without significant reduction in intensity. There are currently no real grounds for easing sanctions or reducing geopolitical confrontation.
- Market Risks: The situation remains tense. Strikes on energy infrastructure continue as part of the conflict: attacks on oil terminals, gas facilities, and power grids are increasing uncertainty. Any escalation affecting export routes (for instance, transit of oil through the Black Sea or residual gas supplies through Ukraine) may destabilize markets. Nevertheless, the global energy supply system is currently demonstrating resilience to local disturbances, while market participants are hoping to avoid a direct confrontation between NATO and Russia that could trigger a global energy shock.
Asia: India and China Strengthen Energy Security
- India's Position: Under pressure from the West, New Delhi temporarily reduced purchases of Russian oil in late autumn; however, India remains one of Moscow's largest clients overall. Indian refineries are actively processing affordable Urals crude, meeting domestic fuel needs. Excess volumes of oil products are being exported by Indian companies, including to European markets, effectively delivering Russian barrels to end consumers post-refinement.
- China's Strategy: Despite an economic slowdown, Beijing maintains a key role in the global energy market. Chinese importers are diversifying supply channels: new long-term LNG purchase contracts have been secured (with Qatar, the USA, etc.), while pipeline gas supplies from Russia are rising (volumes through "Power of Siberia" reached record levels this autumn). Simultaneously, China is increasing its strategic oil reserves and encouraging domestic production to reduce reliance on external sources.
- Growing Demand: Developing Asian economies continue to increase energy resource consumption. Regional demand for oil and natural gas has risen in 2025, although growth rates slowed somewhat due to last year's high prices and more moderate GDP growth. India is demonstrating a steady increase in fuel usage (gasoline, diesel) as the vehicle fleet and industries expand. China focuses on gasification and electrification of the economy, sustaining high demand for natural gas and electricity. The long-term goal for both countries is to meet energy consumption without undermining environmental targets; therefore, capacities in renewable energy sources are rapidly increasing.
Renewable Energy: Record Investments Supported by Governments
- Record Growth: The year 2025 has become another record-breaking year for investments in renewable energy sources. Analysts estimate that global investments in "green" energy have exceeded $1 trillion, surpassing capital expenditures in fossil fuels. The capacities of renewable energy sources are growing at unprecedented rates: over 300 GW of new solar and wind power plants were commissioned globally in a year, exceeding last year's figures.
- Climate Policies: At the COP30 climate summit held in November in Brazil, the global community reaffirmed its commitment to accelerate the energy transition. Countries agreed to aim to triple the installed capacity of renewable energy sources by 2030 and set a benchmark for annual funding of climate initiatives at $1.3 trillion. Numerous governments and companies have announced new targets for emission reductions and increasing the share of clean energy, substantiating their commitments with subsidies and tax incentives.
- New Projects: Large-scale clean energy projects are underway everywhere. In Europe, new offshore wind farms have been commissioned. In China and India, enormous solar farms are being constructed, and in the Middle East, the first hydrogen hubs based on solar and wind energy are being launched. The boom in energy storage systems is ongoing: many countries are deploying large battery complexes to smooth out the irregularities in renewable energy generation. Despite economic challenges, investors remain highly interested in the "green" sector, anticipating long-term returns from low-carbon projects.
Coal Sector: High Demand Supports the Market, But the Peak Has Been Passed
- Asian Demand: China, India, and Southeast Asian countries remain the largest consumers of coal. In 2025, global coal consumption remains close to historical highs due to these regions, where coal still dominates electricity generation. Developing economies are in no hurry to abandon cheap coal, especially amid rising energy needs, using it to meet the baseline energy demands of their systems.
- Signs of 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 begin to decline in the coming years as new renewable energy capacities and gas power plants come online. In several countries, coal output is already decreasing: coal-fired power plants continue to close in the USA and Europe, while plans for building new coal mines and plants in China are being scaled back as part of the announced carbon neutrality goals.
- Prices: Global coal prices stabilized after the tumultuous rise in 2022. The base index for energy coal (ARA, Europe) hovers around $95–100 per ton, significantly lower than last year’s peak values. In Asia, prices have also decreased due to improved logistics and increased supply from major exporters (Australia, Indonesia, and Russia). Significant price upticks are not anticipated unless an extremely cold winter or other unforeseen events occur.
- Pressure from Energy Transition: The coal industry feels increasing pressure from environmental regulations. International banks and funds are increasingly refusing to finance coal projects, and investors demand companies implement strategies to reduce emissions. Even countries heavily reliant on coal are announcing plans to gradually reduce coal generation shares by the 2030s. All this indicates that the global "coal peak" is nearing or has already passed, and coal's role in the long run will gradually decline.
Oil Products and Refineries: Diesel Demand is Growing, Gasoline is Stagnating
- Distillates on the Rise: Global consumption of distillate fuels — primarily diesel and aviation fuel — continues to increase. Global air travel volumes have nearly returned to pre-crisis levels, stimulating growth in jet fuel demand. Diesel remains a staple for transportation and industry: expanding logistics, agriculture, and construction in developing countries support high demand for diesel. Refineries in many regions are raising diesel output to capitalize on favorable market conditions.
- Gasoline: Gasoline consumption in developed countries has peaked and started declining. Improvements in vehicle fuel efficiency, rising sales of hybrid and electric vehicles, as well as 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 alongside growing vehicle ownership. Globally, however, the gasoline market is in a stagnation phase, compelling refiners to adapt to new realities.
- Refining Adaptation: The oil refining industry is adapting to structural shifts in demand. New high-tech refineries in Asia and the Middle East are oriented towards producing in-demand products — diesel fuel, aviation fuel, and naphtha for petrochemicals. Simultaneously, older capacities suffering from low margins and tightening environmental standards are being decommissioned in OECD countries. In 2025, the global oil refining capacity slightly increased compared to the previous year; however, investments are predominantly concentrated in regions with growing 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 ruble bonds worth up to 20 billion rubles with a floating rate tied to the Central Bank's key rate to attract financing under conditions of closed external capital markets. Rosneft is advancing the megaproject "Vostok Oil" in the Arctic, building infrastructure to develop giant fields in Taymyr; the project is expected to significantly increase oil production by the end of the decade.
- Strategies of Majors: Western oil and gas giants (ExxonMobil, Chevron, Shell, BP, etc.) are maintaining spending discipline amid low prices. They focus on projects with maximum returns and limit the growth of capital expenditures, prioritizing shareholder value — paying stable dividends and conducting share buybacks. Consolidation continues: in the USA, several large deals have occurred over the last two years (ExxonMobil acquired shale company Pioneer Natural Resources, Chevron acquired Hess), strengthening the positions of supermajors and their resource bases.
- Middle East and New Directions: State-owned companies in the Persian Gulf are actively investing in both conventional oil and gas sectors and new areas. Saudi Aramco, ADNOC, and QatarEnergy are expanding crude oil and gas production, building refineries and petrochemical complexes, while simultaneously financing projects in hydrogen, carbon capture, and renewable energy. Oil exporters are thus diversifying their 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 the industry’s cautious optimism in forecasting future hydrocarbon demand.
