Current News in the Oil and Gas Industry and Energy Sector as of 1 December 2025: Trends in the Oil Market, Gas Balance in Europe, Renewable Energy Developments, Coal Sector Dynamics, and Prospects for Refineries. Analytics for Investors and Energy Sector Companies.
The current events in the global energy market are unfolding under the pressure of oversupply and geopolitical uncertainty. Oil prices remain near two-year lows amid weak demand, while European gas reserves are close to record levels, ensuring stability as the heating season approaches. In this context, global investors are actively pouring funds into green energy and modernizing grids, considering long-term trends in the transition to clean energy. Below is an overview of the key news in the oil and gas and energy sectors as of 1 December 2025.
Oil Market: Supply and Demand Balance
- OPEC+ Production Increase: OPEC+ participants have agreed to a modest increase in quotas for December (approximately +137,000 barrels/day), while maintaining a pause in further ramp-up in Q1 2026 due to concerns about market oversupply. This supports an oversupply position and restrains significant price increases.
- Demand Slowdown: The International Energy Agency reports weak dynamics in global oil consumption. Demand is growing much slower than last year, which, coupled with stockpiling (especially in the U.S.), is exerting downward pressure on prices.
- U.S. Inventories: Commercial oil inventories in the U.S. continue to rise (reports from the Department of Energy show an increase last week), while the number of active drilling rigs remains close to historical lows. Meanwhile, U.S. production (13.8 million barrels/day in September) is setting records, raising concerns about oversupply in the market.
- Geopolitical Background: Negotiations between the U.S., Russia, and Ukraine regarding conflict resolution still remain in the spotlight for investors. Statements of readiness for peace have temporarily lowered oil prices (in anticipation of sanctions relief), but the lack of guarantees maintains uncertainty. Even if a peace agreement is reached, any easing of restrictions on Russian oil exports will be gradual, so its effect on global prices is unlikely to be immediate.
Gas Market: Reserves and Regional Trends
- European Reserves: As of early December, European underground storage is filled to approximately 75-80% of total capacity, significantly exceeding the average levels of previous years and providing a buffer during the cold season. This situation rules out panic buying and sharp price spikes for gas.
- Prices and LNG: European gas prices (TTF) are holding below €30/MWh — the lowest since the onset of the energy crisis. The U.S. and other suppliers are actively ramping up liquefied natural gas (LNG) exports (for 2025, LNG imports into the EU doubled compared to the same period last year). Meanwhile, Russia continues to redirect gas eastward: supplies to China via the "Power of Siberia" are increasing, and Gazprom is ramping up supplies to Turkey, compensating for the complete cessation of transit through Ukraine.
- Route Changes: Europe continues to diversify its supply routes — additional LNG terminals and interregional gas pipelines are being constructed (through North Africa, Azerbaijan, etc.). The Russian side is seeking new routes and sales mechanisms: land routes to China are being considered, LNG flows from "Yamal LNG" and "Arctic LNG" are accelerating, and new pipelines for southern directions are also being discussed.
Electricity Generation and Renewables: Investments and Innovations
- Record Growth in Green Generation: Many countries have broken historical records for electricity generation from wind and solar. Major wind and solar projects have been completed in Europe, the U.S., and China. Investors are pouring record amounts into the expansion of clean energy and the development of energy storage systems (lithium-ion and alternative batteries) to enhance grid flexibility with a high share of renewable sources.
- Climate Agenda: At the COP30 climate summit in Brazil, world leaders agreed on annual investments of around $148 billion in modernizing electricity grids and energy storage systems, as well as launching a global carbon trading system. However, the final declaration did not include direct calls to abandon hydrocarbons, reflecting an attempt to consider the interests of fuel exporters and supporters of the green transition.
- Nuclear Energy: Russia has announced a large-scale nuclear power plant development program — by 2042, it plans to commission an additional 38 power blocks (approximately 30 GW), which will increase the share of nuclear generation to a quarter of the energy balance. At the same time, China, the U.S., and several European countries are investing in new small modular reactors and exploring innovative nuclear technologies, maintaining the role of nuclear energy in ensuring grid stability.
Coal Sector: Demand and Prices
- Increase in Asia: China entered the 2025/2026 heating season with a record level of coal production — in October-November, electricity generation from coal-fired plants exceeded last year's figures by 7-8%. However, restrictions on coal extraction in China (due to "anti-inflation" measures) are leading to raw material shortages and rising internal prices: at port terminals, coal prices have risen nearly 40% from the year's low.
- Europe and the World: In contrast to Asia, Europe and the U.S. continue to reduce coal consumption (in favor of gas and renewables). Some countries are systematically closing coal-fired power plants, reducing demand. According to World Bank estimates, global coal demand fell by about 1% year-on-year in the first half of 2025 due to rapid growth in green generation, although a resurgence in industrial growth may alter this dynamic.
- Prices and Trade: Limited production by major exporters (Indonesia, Australia) and rising demand in Asia are supporting global coal prices. European traders are reducing purchases, but volatile funds remain in the market: major players are already signing long-term contracts for coal supplies for 2026, expecting that prices will continue to rise.
Oil Products and Refineries: Domestic Market and Exports
- Tax Incentives Abroad: At the end of November 2025, a law was passed in Russia granting oil companies the right to reclaim excise taxes paid for refining oil at foreign refineries under a "processing" scheme. The dampener mechanism applies to gasoline and diesel produced from Russian oil at foreign refineries (including Belarusian), stimulating processing abroad and increasing the export of oil products to Asian and European countries.
- Stabilization of Domestic Market: Following an autumn fuel shortage, the government imposed restrictions on gasoline and diesel exports and expanded dampening instruments. By the end of November, domestic wholesale prices for automotive fuel began to decline, alleviating the shortage at gas stations. This stabilizes retail prices and reduces inflationary pressure on the economy.
Russian Oil and Gas Sector: Finance and Infrastructure
- Financial Results: The total net profit of Russia's largest oil and gas companies fell nearly by half (to around 2 trillion rubles) over the nine months of 2025, and the number of unprofitable enterprises sharply increased. This is due to a drop in the average export price of Urals (to ~$65–70 compared to $75–80 a year earlier), the strengthening of the ruble, and rising costs (insurance, logistics) under sanctions.
- Gas Segment: Gazprom remains profitable thanks to high contract prices and market diversification. Despite the complete cessation of transit through Ukraine, the company has increased supplies through the "Power of Siberia" and "Turkish Stream." The state supports the industry through modernization programs for gas transportation infrastructure and the construction of new underground gas storage facilities.
- Oil Segment: Oil production in Russia is near maximum levels, but revenue is declining due to sanctions and market oversupply. The launch of new projects is hampered by restrictions (sanctions against Rosneft and Lukoil have been imposed), so Gazprom Neft and Rosneft are reallocating resources towards petrochemicals and exports to eastern markets, while domestic refineries operate at reduced capacity.
Geopolitics and Sanctions: Impact on the Energy Market
- Diplomatic Negotiations: The energy carrier market is acutely responding to messages about the progress of negotiations regarding Ukraine. While there are no real shifts toward peace, local price reactions are limited to expectations of future changes. Investors understand that any agreement will only lead to a gradual easing of export restrictions, so fundamental factors of supply and demand predominantly influence prices.
- International Diversification: Western countries continue to systematically reduce their dependence on Russian energy resources. Europe is increasing purchases from the U.S., the Middle East, and other regions, as well as expanding green energy programs. The U.S. and its allies are increasing their own oil and gas production to bolster energy security while simultaneously maintaining sanctions against Russian oil and gas projects.
