News Oil & Gas and Energy — Tuesday, 23 December 2025: Oil at Lows, Hopes for Peace, Gas Market Steady
Current events in the global fuel and energy sector (FEC) as of 23 December 2025 attract the attention of investors and market participants with mixed signals. Diplomatic efforts have shown some movement: talks involving the US, EU, and Ukraine inspire cautious optimism regarding a potential ceasefire in the protracted conflict. However, no concrete agreements have been reached so far, and the strict sanctions regime in the energy sector remains in place.
The global oil market remains under pressure from oversupply and weakened demand. Benchmark Brent crude prices have fallen to around $60 per barrel – the lowest level since 2021. This indicates the formation of a surplus of crude on the market. On the contrary, the European gas market demonstrates resilience: even at peak winter consumption, gas storage facilities in the EU are filled to approximately 68%, and stable supplies of liquefied natural gas (LNG) and pipeline gas keep prices at a moderate level significantly below last year's values.
Meanwhile, the global energy transition is gaining momentum. Many countries are setting new records for electricity generation from renewable sources (RES), although traditional coal and gas power plants still play an essential role in ensuring energy system reliability. In Russia, after a summer surge in fuel prices, authorities have taken strict measures (including extending the ban on the export of oil products), stabilising the situation in the domestic market. Below is a detailed overview of key news and trends in the oil, gas, electricity, and raw materials sectors as of today.
Oil Prices and OPEC+ Strategy
Ongoing declines in oil prices are evident, with Brent hovering around $60 per barrel and WTI around $55, marking the lowest levels in nearly four years. Investors note that a combination of fundamental factors prevents prices from rising and instead supports a bearish trend.
- Increase in supply: Rising production from both OPEC+ countries and independent producers has led to excess oil volumes. Since spring 2025, total production from OPEC+ countries has increased by nearly 3 million barrels per day, while other exporters have also reached record levels, creating a surplus in the market.
- Hopes for peace: Progress in negotiations to resolve the situation in Ukraine has generated expectations of easing sanctions and a full return of Russian oil volumes to the global market. This factor further pressures prices, being factored into market expectations.
- OPEC+ policy: After several months of gradual production increases, OPEC+ participants have decided to pause further supply growth in Q1 2026 to prevent overproduction. At their December meeting, the alliance agreed to a symbolic increase in quotas (+137,000 barrels/day) and are prepared to act according to the situation. Key exporters express their commitment to market stability and are willing to cut production again if prices fall below acceptable levels (around $50 per barrel).
The cumulative impact of these factors keeps the global oil market moderately oversupplied. Geopolitical incidents and new restrictions currently only cause short-term price fluctuations without altering the overall downward trend. Market participants anticipate new signals – from the progress of diplomatic efforts and actions by OPEC+ – capable of shifting the balance of risks for oil prices.
Natural Gas and LNG Market
The European gas market has entered the winter season with relative confidence. Underground gas storage across the EU is filled to more than two-thirds capacity, minimizing the risk of shortages even during peak demand periods. Active LNG imports have compensated for nearly complete cessation of direct pipeline supplies from Russia, stabilizing gas prices at levels significantly below the crisis peaks of 2022, greatly alleviating the burden on industry and households.
- Record LNG imports: In 2025, Europe purchased approximately 284 billion cubic meters of liquefied gas – a historic maximum. The key supplier has been the US (up to 60% of the volume), with significant shipments also coming from Qatar, Africa, and other regions.
- Transition from Russian gas: The European Union is formalizing plans to completely halt Russian gas imports by 2027. Starting from early 2026, a ban on purchasing Russian LNG on the spot market will take effect, forcing EU countries to fully reorient towards alternative supply sources.
On a global scale, gas demand remains stable, primarily driven by Asian markets, yet competition among suppliers is increasing. Middle Eastern and North African countries are actively investing in new LNG projects, aiming to capture a share of the growing market. Simultaneously, the expansion of gas exports from the US and Australia is leading to an oversupply, keeping global prices within moderate limits.
Renewable Energy: Record Growth
2025 has been a landmark year for renewable energy. The world has witnessed unprecedented additions of new solar and wind generation capacity. According to industry reports, capacity additions of solar and wind power plants in the first half of 2025 have increased by more than 60% compared to the same period last year. For the first time in history, electricity generation based on RES surpassed output from coal power stations (on a six-month basis). Total global investments in "clean" energy in 2025 reached approximately $2 trillion; however, even record growth rates are still insufficient to meet climate goals – further investments and modernization of electricity grids are required.
China's success stands out, as it has become the locomotive of the energy transition. By adding hundreds of gigawatts of new solar and wind stations, China has managed to curb CO2 emissions in 2025, despite increased energy consumption. China's experience shows that large investments in RES can simultaneously meet rising electricity demands and reduce the carbon footprint of the economy.
Coal Sector: Peak Demand
Global coal demand reached an all-time high in 2025, although growth rates have practically stalled. According to the International Energy Agency (IEA), global coal consumption increased by only 0.5%—to approximately 8.85 billion tons, marking a record volume. A prolonged plateau phase with a gradual decline is expected heading into 2030. Coal remains the largest fuel source for electricity generation globally, but its share is starting to decrease due to competition from alternative energy sources.
- China: In the largest coal-consuming nation, China (accounting for about half of global demand), consumption stabilized in 2025. A gradual decline in coal usage is anticipated by the end of the decade as new RES capacities come online.
- India: Thanks to a record generation of hydroelectric power in 2025, coal consumption in India experienced a temporary reduction for the first time in years.
- USA: A slight increase in coal burning has been noted in the United States amid high gas prices and government support measures prolonging the operation of coal-fired power plants.
Thus, the peak of global coal demand is close. Further dynamics in the sector will depend on the pace of energy transition in the largest economies. As the development of RES and other clean sources accelerates, a gradual displacement of coal from the fuel balance is expected.
Oil Products and Refining: High Margins
The oil products market at the end of 2025 is showing high profitability for refining companies. Global refining margin indicators (the so-called "crack spreads") have risen to multi-year highs. This is due to several factors: sanctions reducing the export of oil products from Russia, closures for repairs at several large refineries in Europe and the US, and delays in the commissioning of new refining capacity in the Middle East and Africa. The European diesel fuel market remains particularly profitable, with refining margins rising to levels unseen since 2023, indicating a structural deficit in this type of fuel.
In response, refiners are raising utilization rates across the board to capitalize on the favorable environment. Major oil companies have recorded sharp profit increases in the downstream segment (refining and marketing) in recent quarters due to high gasoline and diesel prices. According to the IEA, European refiners have increased oil refining by several hundred thousand barrels per day in the second half of 2025, thanks to record margin indicators. Analysts note that without the introduction of new capacities in Europe and North America, the fuel deficit may persist, keeping high margins in 2026 as well.
Geopolitics and Sanctions: Market Impact
Geopolitical factors continue to exert significant influence on raw material markets. Sanction regimes regarding the oil and gas sector remain in place, and recent events demonstrate strict compliance with restrictions. In December, the US intercepted an oil tanker off the coast of Venezuela, thwarting an attempt to bypass sanctions. Simultaneously, Washington intensified pressure on the "shadow fleet" transporting Iranian oil: despite new prohibitions, exports from Iran reached their highest levels in recent years in 2025 due to active supply to Asia. Russian oil and oil product exports have fully reoriented towards alternative markets (China, India, the Middle East), yet price restrictions and the EU embargo continue to curtail industry revenues. The EU is also tightening restrictive measures: in addition to the existing oil embargo, a ban on the import of Russian LNG will come into effect in early 2026, thus completing Europe's rejection of Russian energy carriers.
In this context, market participants are incorporating heightened geopolitical risks and price premiums into their forecasts. Any signals of potential easing of sanctions or diplomatic progress can significantly influence investor sentiment and price dynamics. Meanwhile, oil and gas companies are adapting to the new structure of flows and prices – diversifying logistics and reorienting towards regions less susceptible to sanctions pressure.
Investments and Projects: Looking Ahead
Despite market volatility, significant investments continue in the energy sector. Middle Eastern countries are ramping up investments in oil and gas production: national companies are expanding production capacities to maintain their market share in the long term. Specifically, in the UAE, the state corporation ADNOC secured funding of around $11 billion for gas production enhancement projects. Simultaneously, leading exporters such as Qatar and the US are implementing expansions of LNG terminals, anticipating further growth in global demand for "blue fuel."
Substantial funds are also being directed toward "green" energy. Global investments in renewable sources are growing at an accelerated pace: corporations are investing capital in building solar and wind farms as well as energy storage facilities. However, meeting decarbonization goals will require even greater efforts and resources. New technologies – such as hydrogen energy and industrial energy storage – are becoming increasingly attractive investment avenues. The year 2026 is expected to bring new mergers and acquisitions in the sector, as well as the launch of major projects in both the traditional oil and gas segment and the RES sphere.
