Current News in the Oil, Gas, and Energy Sector for Thursday, December 18, 2025: Oil, Gas, Electricity, Renewable Energy, Coal, Refineries, and Key Events in the Global Energy Market.
Oil and Petroleum Products
The global oil market remains under pressure: Brent crude is hovering around $60 per barrel, while WTI trades near $55 per barrel—these are the lowest levels seen in recent years. The primary factors contributing to the decrease in oil prices include:
- Expected Supply Surplus: A surplus of production over demand is forecasted for 2026 as non-OPEC countries ramp up production to record levels.
- Hopes for Peace in Ukraine: Progress in negotiations between Russia and Ukraine has raised expectations of sanctions being lifted or eased, allowing a portion of Russian oil exports back onto the market.
- OPEC+ Policy: The OPEC+ alliance has decided to pause its production increases in the first quarter of 2026, signalling caution amid the risk of oversupply.
As a result of these factors, oil prices have decreased significantly compared to the beginning of the year. Brent and WTI may finish 2025 at their lowest levels since 2020. The drop in crude prices has already been reflected in the petroleum products markets: gasoline and diesel prices have also declined. In the U.S., retail gasoline prices have dropped in most states ahead of the holiday season, reducing consumer expenses. European refiners, who have switched to alternative crude oil instead of Russian oil, are operating with stable feedstock supplies. Global refineries generally maintain high levels of processing, benefitting from lower crude prices, although fuel demand is growing at a moderate pace. Refining margins remain stable, and there is currently no indication of gasoline or diesel shortages in the global market.
Gas Market and LNG
The gas market is exhibiting a paradoxical scenario: despite an early and cold winter, natural gas prices in Europe are continuing to decline. Prices at the Dutch TTF hub have fallen below €30 per megawatt-hour, marking the lowest point since spring 2024. This is nearly 90% lower than the peak values during the 2022 crisis and 45% lower than prices seen at the start of 2025. The primary reason for this decline is the overwhelming influx of liquefied natural gas, particularly from the U.S., which compensates for reduced pipeline supplies from Russia. Gas storage in the European Union is filled at approximately 75%, which, although below historical averages, in conjunction with record LNG imports, provides a sufficient buffer for stable prices.
- Europe: High LNG volumes are lowering gas prices, even with decreased storage levels. The U.S. supplied over half of Europe’s LNG imports in 2025 by redirecting shipments from Asian markets. This led to a dramatic narrowing of the spread between European prices and cheaper American gas.
- U.S.: In North America, gas futures have increased amid forecasts for anomalously cold weather. The Henry Hub price has risen above $5 per MMBtu due to the threat of polar vortex conditions and increased heating demand. However, domestic output in the U.S. remains high, tempering price increases as weather normalizes.
- Asia: The Asian gas market is relatively balanced as the year comes to a close. Demand in key countries (China, South Korea, Japan) has been moderate, allowing for the redirection of additional LNG shipments to Europe. Prices at Asian hubs (e.g., JKM) have remained stable without sharp fluctuations, as competition for cargoes between Europe and Asia has diminished compared to 2022.
Thus, the global natural gas market is entering winter with much more confidence than a year ago, with sufficient supplies and import deliveries to meet needs even during cold periods. The flexibility of the LNG market plays an important role—tankers quickly adjust their courses in favour of Europe, smoothing out regional imbalances. With average temperatures maintained, the price situation for gas consumers looks promising.
Coal Sector
The traditional coal segment reached a historic peak in consumption in 2025, but prospects indicate a slowdown is imminent. According to the International Energy Agency (IEA), global coal consumption rose by approximately 0.5% in 2025, reaching a record 8.85 billion tons. Coal remains the largest source of electricity generation worldwide; however, its market share is expected to decline: the IEA forecasts that coal demand will plateau and gradually decrease by 2030 with the rise of renewable energy and nuclear generation. Regional trends present a mixed picture:
- India: Coal consumption decreased (only the third time in the last 50 years) due to an unusually strong monsoon season. Heavy rainfall boosted hydroelectric generation and dampened demand for electricity from coal-fired power plants.
- U.S.: Coal usage, in contrast, has increased. This was spurred by higher natural gas prices in the first half of the year and political support for the sector. The new administration in Washington has paused the closure of certain coal power stations, temporarily boosting domestic demand for coal for power generation.
- China: The world’s largest coal consumer maintained consumption levels of the previous year. China burns 30% more coal than the rest of the world combined; however, a gradual decline is expected by the decade's end as massive capacities for wind, solar, and nuclear energy are introduced.
It appears that 2025 will likely be a peak year for coal. Increased competition from gas (where feasible) and especially renewable energy sources will gradually displace coal from the energy balance of many nations. However, in the short term, coal remains in demand in developing Asian economies, where energy consumption growth still outpaces the construction of new clean capacities.
Electricity and Renewable Energy
The electricity sector continues to transform under the influence of climate agendas and fuel price fluctuations. In 2025, the share of renewable energy sources (RES) in global electricity generation reached new heights: many countries introduced record capacities of solar and wind power plants. For instance, China has actively increased solar generation, while Europe and the U.S. have launched new offshore wind farms and photovoltaic projects, driven by government support and private investment. By year-end, global investments in green energy remain high, approaching those in fossil fuels.
However, the rapid development of RES raises the challenge of ensuring stability in energy systems. This winter in Europe, weather volatility has been a significant factor: periods of weak wind and short daylight hours increased the burden on traditional generation. At the beginning of winter, EU countries were forced to ramp up gas and coal generation due to low output from wind farms amid an anticyclone. This temporarily raised electricity prices in some regions. Nevertheless, thanks to the growth of RES capacity coupled with a high share of gas in the balance, there have been no significant problems with energy supply. Governments and energy companies are also investing in energy storage systems and grid modernisation to smooth peaks and integrate renewable energy sources.
Climate commitments continue to dictate the trend: at the recent global climate summit (COP30) in Brazil, calls were made to accelerate the energy transition. Several countries agreed on measures to triple the deployment of RES by 2030 and enhance energy efficiency. There is also a revival of interest in nuclear energy: new nuclear power plants are being built in various regions, and the lifespan of existing ones is being extended to provide non-emitting baseload generation. Overall, the electricity sector is moving towards a cleaner and more sustainable future; however, the transition period requires a balance between supply reliability and environmental goals.
Geopolitics and Sanctions
Geopolitical factors continue to exert a strong influence on energy markets. The focus remains on the conflict in Eastern Europe and the associated sanctions:
- Peace Negotiations: December has seen the most significant progress in dialogue aimed at resolving the situation in Ukraine since the onset of the conflict. The U.S. has expressed willingness to provide Ukraine with security guarantees similar to NATO, and European diplomats have reported constructive negotiations. Expectations for a potential ceasefire have intensified, although Russia claims it will not make territorial concessions. The growing hope for a cessation of hostilities has sparked discussions about the prospects for lifting or easing oil and gas sanctions against Russia in the future.
- Pressure from Sanctions: At the same time, Western countries are signaling their readiness to intensify pressure if the peace dialogue stalls. Washington has prepared another package of sanctions targeting the Russian energy sector which could be enacted if Moscow rejects the proposed conditions for a peace agreement. Earlier in the fall, the U.S. and UK introduced additional restrictions against Russian oil giants Rosneft and Lukoil, complicating their efforts to attract investments and technology.
- Infrastructure Risks: Ongoing hostilities and sabotage continue to pose threats to energy supply. In the past week, the Ukrainian side has ramped up drone attacks on oil infrastructure targets deep within Russia. Specifically, there have been fires at refineries in Krasnodar Krai and on the Volga due to drone strikes. Although these incidents have only a marginal local impact on the overall fuel supply, they highlight the persistent military risks for the sector until a durable peace is achieved.
- Venezuela: In Latin America, geopolitics is also playing a role in oil markets. After partial easing of sanctions against Venezuela last autumn, the United States has once again tightened its control over compliance with the terms of deals. In December, an incident involving the detention of a tanker carrying Venezuelan oil occurred due to suspicions of violating licensing terms. The state company PDVSA has faced demands by clients to increase discounts and alter delivery terms. This has complicated Venezuela's export growth, despite the recent U.S. decision to temporarily allow increased production in exchange for political concessions from Caracas.
Overall, the sanction standoff between Russia and the West, alongside other international disagreements, continues to inject uncertainty into the global TES. Investors are closely monitoring news from political fronts, as any changes—from breakthroughs in peace negotiations to the introduction of new restrictions—can significantly impact oil, gas, and commodity prices.
Corporate News and Projects
Major oil and gas companies and energy projects around the world are concluding the year with several important events and decisions:
- Shell Exits German Refinery: British-Dutch Shell has renewed attempts to sell its 37.5% stake in the Schwedt refinery in Germany. This facility was previously controlled by Rosneft and has come under the management of the German government since 2022. Shell is seeking a buyer before the end of January, aiming to fully distance itself from an asset associated with sanction risks.
- Middle Eastern Expansion: In Kuwait, the oil and gas services company Action Energy (AEC) successfully conducted an initial public offering on the local exchange and announced plans for regional expansion. The raised funds will be directed towards enhancing drilling and field servicing capabilities, both in Kuwait and neighboring countries where oil and gas production is increasing. This move reflects the strengthening position of Middle Eastern businesses amid rising oil production in the region.
- New Gas Deals in Europe: European buyers continue diversifying their gas supply sources. The Hungarian state conglomerate MVM has signed a 5-year contract with American Chevron for the supply of liquefied gas totaling approximately 2 billion m3 per year. This LNG will be delivered through terminals in Europe, reducing Hungary's dependence on pipeline gas and bolstering the country’s energy security. The deal exemplifies deepening cooperation between the U.S. and Eastern Europe in the gas market.
In general, oil and gas companies are adapting to the new market reality: some are reassessing their assets and portfolios in light of geopolitical risks (as Shell is doing in Europe), while others are leveraging favorable market conditions to grow (like Middle Eastern players). Concurrently, investments continue in both traditional oil and gas projects and in energy transition initiatives. Sector giants are required to balance short-term profitability with long-term decarbonization trends, shaping key strategic decisions in the TES as we approach 2026.
