Oil and Gas News and Energy, Wednesday, December 3, 2025 — OPEC+ Conducts Capacity Audits, Oil Prices Drop

Current News in the Oil and Gas Industry and Energy for Wednesday, December 3, 2025: OPEC+ Decisions, Oil Price Dynamics, Gas Market Situation, Electricity Sector, Renewable Energy, Coal, Refineries and Petroleum Products. Analytics for Investors and Energy Market Participants.

Oil Market

• Global Oil Market: An oversupply and active production growth are putting downward pressure on prices. Brent is trading around $63/barrel, close to its two-year lows.
• OPEC+: At the latest OPEC+ meeting, a moderate increase in oil production for December (+137,000 barrels/day from November's level) was agreed, with a pause on further increases expected at the beginning of 2026.
• USA: U.S. oil production continues to grow: in July 2025, output in the Lower 48 states reached a record 11.4 million barrels/day. Drilling efficiency is improving, although the number of active rigs is decreasing.
• Transport: Last week, Ukrainian drones damaged one of the berths on the Caspian Pipeline Consortium (CPC) in the Black Sea, but oil transport has already resumed through another docking site.

Gas Market

• European Stocks: European gas storage facilities are around 75–80% full, contributing to a stable market atmosphere. January TTF futures have fallen to an all-time low of ~€28/MWh (around $335/1,000 m³), supported by warm weather and excess fuel supplies.
• LNG Supplies: Liquefied natural gas exports from the U.S. and Australia are ramping up. A record number of LNG vessels are currently en route globally. Meanwhile, demand in Asia is slowing, with China cutting its own LNG purchases and even reselling excess supplies, further stabilizing the European market.
• Russia – China: Gazprom is breaking records in gas supplies to China: on December 1, “Power of Siberia” for the first time transferred over 100 million m³ per day, and annual volumes are expected to reach 44 billion m³. The increase in supplies through “Power of Siberia” reduces China’s dependence on LNG and impacts the global gas balance.
• Transit and Negotiations: Consultations regarding the extension of gas transit through Ukraine after 2024 are ongoing, along with discussions about Russia’s energy relationship with the European Union. Market participants expect that final agreements on gas may affect the supply structure to Europe in 2026.

Electricity and Renewable Energy

• Infrastructure Investments: At the COP30 climate conference, major global utilities announced plans to increase expenditures on energy transition to a record ~$148 billion annually. Of this, approximately $66 billion per year will be allocated to new renewable energy sources, and around $82 billion will go towards building networks and energy storage facilities.
• Growth in Renewables: Installed capacity for green generation is actively growing. Many countries set annual records for solar and wind power installations in 2025 (e.g., India added over 25 GW of new capacity in the first seven months). Accelerated renewables growth keeps CO₂ emissions levels stable.
• Decarbonization: The final document from COP30 reaffirmed commitments under the Paris Agreement but did not introduce a direct phase-out of oil and coal. Meanwhile, some countries are tightening environmental policies: South Korea has announced its entry into the Powering Past Coal alliance and promised not to build new coal-fired power plants, planning to retire 40 out of 61 existing power stations by 2040.
• European Strategy: The European Union is maintaining its course toward energy independence. Ambassadors have agreed on a plan to phase out imports of Russian oil and gas by 2028, alongside implementing an embargo on the purchase of Russian LNG starting in 2027. Member states are also required to ensure gas storage is filled to at least 90% by November 2027.

Coal Sector

• Asian Demand: In Southeast and South Asian countries, coal remains the primary source of electricity. Long-term contracts and rapidly growing industries support high levels of coal consumption, although the share of renewable sources is gradually increasing.
• China: The world's largest coal consumer is showing signs of demand stabilization. Plans are in place to curb the growth of coal generation – new power plants are being constructed more slowly, and several provinces are imposing restrictions on coal projects. This has already reflected in a slowdown of CO₂ emission growth.
• Carbon Transition: Some countries are officially announcing the phase-out of coal. For example, South Korea has joined the Powering Past Coal alliance, ceased the construction of new coal-fired power plants, and promises to close the majority of its existing coal power stations by 2040.

Petroleum Products and Refineries

• Fuel Demand: Global consumption of diesel and jet fuel continues to grow (stimulating distillate fractions), while gasoline demand remains relatively weak due to increased energy efficiency of transport and slowing economic growth.
• Refinery Operations: Many major refineries in Asia and the Middle East are operating near full capacity to meet domestic demand and fuel exports. European refineries are running at full tilt, utilizing alternative oil sources (such as Azerbaijani or Kazakh oil) to compensate for restrictions on Russian supplies.
• Margins and Projects: Refining margins remain uneven: low oil prices limit profits amid oversupply, but diesel shortages support profitability for distillate refineries. New capacity expansion projects are underway in Asia and the Middle East, whereas investments in refineries in developed countries are limited due to transitions to renewable sources and stringent environmental regulations.

Companies and Investments

• Russian Emissions: Gazprom Neft is preparing to issue ruble bonds worth up to 20 billion rubles with a floating coupon linked to the key rate. The Russian Ministry of Energy has approved the investment program of RusHydro for 2026, with total funding remaining at previously planned levels.
• Market Deals: International companies are actively diversifying. ExxonMobil is in negotiations with the Iraqi government to acquire Lukoil's stake in the large West Qurna-2 field, as Lukoil, under sanctions, plans to sell its overseas assets. Meanwhile, traders and oil companies (Gunvor, Vitol, Citadel, among others) are increasing investments in oil and gas extraction, especially in U.S. shale projects, aiming to build integrated supply chains.
• Large Investment Programs: Beyond private deals, energy companies and investors plan significant capital influxes into the sector. The global association of energy holding companies UNEZA anticipates over $1 trillion in investments by 2030 (including support for tens of thousands of kilometers of new lines and battery capacities), with production increases and infrastructure remaining priorities in the oil and gas sector.

Geopolitics and Regulation

• Ukraine: Negotiations to cease the conflict remain a critical factor for markets. Simultaneously, practical actions continue: Russia and Ukraine are mutually targeting infrastructure (oil and gas facilities and tankers). Against this backdrop, the risk premium for energy resources has increased, although hopes for settling military actions exert downward pressure.
• Sanctions: Western restrictions on Russian energy resources continue to influence the market. U.S. sanctions against Rosneft and Lukoil have already reduced oil and gas revenues for the Russian budget, with tax prices falling to nearly $57/barrel between January and November 2025, while the ruble has strengthened. The EU is gradually implementing a full ban on Russian oil and gas: ambassadors have approved a bill to phase out Russian fuel by 2028 and plan an LNG embargo starting in 2027.
• Middle East and Asia: Instability in the region continues to influence oil and gas markets. Iranian oil reserves and the potential resumption of its exports remain on OPEC’s agenda, while a potential normalization of relations between the U.S. and Venezuela could alter the supply structure. Meanwhile, Asian countries are strengthening energy security through bilateral agreements and the development of local resources.

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