Current Energy Market News for Friday, 26 September 2025: Oil Price Surge, Europe's Gas Situation, Fuel Shortages in Russia, Sanctions, Renewables, and Corporate Transactions. An Analysis of Global Trends for Investors and Energy Market Participants.
The energy markets are demonstrating mixed dynamics: oil prices have reached local peaks amid geopolitical risks, Europe is confidently preparing for winter with high gas reserves, and Russia is struggling with fuel shortages while limiting exports. Meanwhile, the global energy sector continues its transition to a 'green' future – investments in renewable energy have hit record levels, and major companies are reassessing their strategies and demand forecasts.
Oil Market: Prices at a Peak Due to Limited Supply
Global oil prices remain elevated at the end of September. Earlier this week, Brent prices rose to a seven-week high (~$69 per barrel) and WTI reached ~$65, which is 2-3% higher than levels at the beginning of the month. The price increase is driven by several factors:
- The unexpected drop in US oil inventories: According to the Energy Information Administration (EIA), commercial inventories fell by approximately 0.6 million barrels last week, whereas analysts had expected an increase. This signal of limited supply has supported the market.
- Geopolitical risks in Eastern Europe: Ukraine has intensified drone strikes on Russian oil infrastructure, damaging oil pumping stations in the Volgograd region, and a state of emergency has been declared in the port of Novorossiysk. These events have heightened concerns over potential disruptions in the supply of Russian crude.
- Sanction-related uncertainty: Western countries are discussing the possibility of new sanctions against the Russian energy sector. Specifically, the US administration has urged the EU to expedite the phase-out of Russian oil and gas. The market is pricing in the risk of tighter restrictions, further pushing prices up.
- The return of some supply: A constraining factor for prices has been the news of an agreement in Iraq to resume oil exports from the Kurdistan region (after a nearly six-month hiatus). Additionally, the peak of the summer transport and holiday season has passed, leading to a seasonal decrease in fuel demand as we head into autumn.
In the latter half of the week, a slight correction was observed in the oil market: some investors took profits after the rally, and Brent slipped below $69 (by ~0.5%). Nevertheless, prices remain close to recent peaks. The market balance is fragile – on one hand, participants fear supply shortages; on the other hand, they anticipate increased supplies in the fourth quarter due to a gradual rise in OPEC+ production and the return of Kurdish oil.
Gas Market: Europe Ready for Winter with Reserves and LNG Supplies
The situation in the natural gas market is more stable. European countries have accumulated significant gas reserves ahead of the heating season: EU underground storage facilities are, on average, filled close to the target level of 90%. This means that Europe is entering winter with a solid buffer in case of cold weather or supply disruptions.
- Thanks to a mild summer and demand conservation measures, Europe was able to inject gas without the previous haste. According to Gas Infrastructure Europe, by the end of September, the overall storage level surpassed last year's figure for the same date.
- LNG imports remain high. Weakened demand for liquefied gas in Asia has freed additional volumes for Europe. This has helped to compensate for the decrease in pipeline supplies from Russia and the planned maintenance at several North Sea fields.
- Wholesale gas prices in the EU (TTF index) are holding within the range of €30-35/MWh, significantly lower than the peak levels of 2022. A balanced market and high reserves reduce the likelihood of sharp price spikes this winter.
High reserves and diversified sources – from Norwegian pipeline gas to LNG from the US and the Middle East – enhance Europe's energy security. While risks remain in the Mediterranean (notably instability in transit through the Suez Canal due to the conflict in Yemen and limited supplies from Libya), overall, the European gas market in 2025 is significantly calmer than it was two years ago. This allows European countries to simultaneously reduce their dependence on Russian gas while keeping electricity tariffs for industry and households at manageable levels.
Russian Market: Fuel Shortages and Export Restrictions
In Russia, the situation in the oil products market has worsened this autumn. Fuel shortages, primarily petrol and diesel, are being reported in various regions. The main reasons stem from a combination of seasonal demand increases (the harvesting campaign raises fuel consumption among agricultural producers) and a reduction in supply from refineries, attributed to emergency shutdowns at some facilities following recent drone strikes by Ukrainian forces.
Ukrainian strikes on refineries in southern Russia have led to a drop in output for certain fuel grades. Consequently, a mismatch has developed in the domestic market: wholesale prices on exchanges have increased, while fuel shortages have been experienced at certain filling stations. To stabilise the situation, the Russian government has urgently implemented measures to restrict fuel exports:
- Ban on gasoline exports – initially introduced in late August as a temporary measure, this has now been extended at least until the end of 2025. It applies to all producers and intermediaries (traders) of gasoline, excluding deliveries under intergovernmental agreements.
- Partial ban on diesel exports – introduced until the end of the year for independent fuel sellers (those who purchase fuel from producers and resell it abroad). Oil companies directly producing diesel fuel are exempt from this measure to preserve their incentives to maintain high refining levels.
According to Deputy Prime Minister Alexander Novak, the emerging shortage is locally confined and can be mitigated by releasing reserve volumes of oil products to the domestic market. Authorities hope that export restrictions will saturate the internal market, curb rising fuel prices at filling stations, and ensure priority supply for agricultural producers and other consumers. As Russia is one of the largest suppliers of diesel globally, the reduction in its exports has already impacted world prices, with diesel futures in Europe slightly rising on expectations of lower supplies. Nevertheless, for Moscow, internal stability has become the priority: preventing a fuel crisis ahead of winter has become a strategic goal for the government.
Sanctions and International Cooperation: Uncertainty Persists
Geopolitical factors continue to exert a strong influence on the energy sector. Western countries maintain a stringent stance towards Russia's energy sector. The US has renewed pressure: President Donald Trump publicly urged European nations to expedite their exit from Russian oil and gas supplies to cut Moscow's revenues and hasten the end of the conflict. The EU, for its part, is gradually closing remaining loopholes by introducing additional restrictions, including on the re-export of petroleum products to third countries.
At the same time, diplomatic efforts have been made to resolve the situation in Ukraine. In mid-August, a meeting between the leaders of the US and Russia took place, during which paths towards achieving a peace settlement were discussed. However, it yielded little progress; hostilities continue, and hopes for a swift easing of sanctions have yet to materialize. Sanctions against Russia in the energy sector remain in effect, obstructing the normalisation of oil and gas trade flows.
Despite this, major businesses are preparing for a potential improvement in relations in the future. For instance, American ExxonMobil signed a preliminary agreement with Rosneft outlining a framework for potential compensation of around $4.6 billion in losses incurred when Exxon withdrew from Russian projects in 2022. According to sources, this agreement is currently non-binding and will effectively come into force only if sanctions are eased and progress is made in peace negotiations. However, the very occurrence of such dialogue is significant: it indicates that some international investors are hopeful for a partial restoration of cooperation with Russia in the long term. Previously, BP and Shell had made substantial write-downs on their Russian assets, and they, along with Exxon, will be interested in regaining lost profits if the political landscape improves.
In the short term, however, the sanctions standoff continues to constrain the sector. Russian oil and product exports are maintained at reduced levels due to embargoes and price caps, and Western companies are cautiously evaluating any projects associated with Russia. Investors in the CIS region are closely monitoring these developments, recognising that political decisions may sharply alter the configuration of energy markets.
Electricity and Coal: Balancing Reliability and Ecology
In the electricity sector, European countries are seeking a compromise between the reliability of energy systems and decarbonisation targets. An example is Italy: Energy Minister Gilberto Pichetto Fratin has stated that the country will not be able to completely abandon coal power generation by the end of 2025, despite previous plans. The Italian government has postponed the closure of the last coal-fired power plants (in Civitavecchia and Brindisi), justifying this by the need to ensure backup capacity amid geopolitical uncertainty.
This decision to extend the operation of coal plants relates to the current situation: a war is ongoing in Europe, and instability persists in the Middle East, creating risks for energy resource supplies. In particular, there are disruptions in shipping through the Suez Canal due to actions by Yemeni rebels, as well as a reduction in gas exports from Libya due to internal instability. In such circumstances, the Italian government has opted for caution and temporarily retained coal generation to avoid potential electricity shortages.
This move reflects a broader trend: energy security issues are a priority, even if it means temporarily slowing down ecological plans. Nevertheless, the general European trend remains unchanged – the share of coal in electricity generation is steadily declining, giving way to gas and renewables. According to the European Commission, CO2 emissions from electricity generation in the EU have decreased in 2025 compared to pre-crisis levels in 2019, despite a temporary increase in coal use in some countries. Stabilising gas prices and the growth of renewable energy generation help energy companies maintain a balance between reliability and environmental considerations: electricity wholesale prices in Europe are expected to remain significantly lower than the peaks of 2022 this winter, benefiting both consumers and energy companies.
Renewable Energy: Investment Hits Record Levels
The global transition to clean energy is gaining momentum. The year 2025 could become a record year for investments in renewable energy. According to the International Energy Agency, global investments in clean energy exceeded $1.9-2 trillion in 2024, more than doubling spending in the oil and gas sector. Capital is increasingly being directed towards solar and wind generation, as well as accompanying infrastructure (networks, energy storage systems).
At the September Climate Week in New York, state leaders and major energy companies confirmed their goal of doubling or even tripling the deployment of new renewable capacity by 2030. To achieve this, regulatory procedures for constructing wind farms and solar stations are proposed to be expedited, alongside expanding support measures – from 'green' tariffs to state guarantees on investments. Special attention is given to attracting funding in developing countries, which currently receive less than 10% of 'green' investments, even though they account for one-third of global GDP and the main growth in energy demand.
The rapid growth of renewable energy is already altering the structure of the global energy sector. In several countries, the share of renewables in electricity production is consistently reaching new records. At the same time, the cost of technologies is decreasing: the cost of producing 1 kWh of solar or wind energy has fallen by several tens of percent over the past decade. All this strengthens the trend: clean energy is being viewed not only as a means of combating climate change but also as a factor in ensuring energy independence and reducing economic costs. Nonetheless, further large-scale growth in renewables will require addressing issues related to energy storage, grid modernisation, and balancing power systems during periods when the sun isn't shining and the wind isn't blowing.
Long-Term Forecasts: Demand for Oil, Gas, and Coal
The energy transition and geopolitical shifts are prompting analysts to reassess long-term demand forecasts for energy resources. In particular, BP has revised its estimate of the peak oil consumption in its new Energy Outlook 2025 report. A year ago, BP had anticipated that global oil demand would peak (~102 million barrels per day) as early as 2025, but the company now expects continued growth until 2030. Under the updated scenario, oil consumption is projected to rise to ~103-104 million barrels per day by the end of the decade, driven by developments in aviation, petrochemicals, and ongoing economic growth in Asia, before initiating a prolonged plateau and gradual decline towards the 2040s.
Other key trends highlighted in the forecasts from BP and the IEA include:
- Renewables versus Coal: By 2040, renewable energy (solar and wind power) is expected to surpass coal in global energy balance share. This reflects the accelerated growth of clean technologies and the policy goals of many countries to abandon coal generation.
- Demand for Natural Gas: Global gas consumption is projected to increase by nearly 20% by 2040 compared to current levels. Growth will primarily occur in Asia (China, India, and other developing markets), where gas is viewed as a more environmentally friendly substitute for coal. However, after 2030, the rate of growth in gas demand will slow due to intensified climate policies and competition from hydrogen and renewables.
- Coal Sector Prospects: Global demand for coal is approaching its peak and is expected to begin declining over the next 10-15 years. In several regions (Europe and North America), the decline in coal use is already well underway, while in some Asian countries, the peak coal consumption may occur in the mid-2020s, followed by a downturn. A long-term risk for the coal sector is the tightening of environmental regulations and competition from cheap renewables and gas.
Overall, the consensus suggests that the 2020s will be a turning point: oil consumption growth will slow and plateau, gas will maintain its important role as a 'transition' fuel, and renewables will capture an increasing share of electricity generation. Energy companies and investors must adapt to these changes – diversify assets, invest in new technologies (from hydrogen energy to electricity storage), and consider the tightening climate agenda when planning projects for the decades ahead.
Corporate News: Deals and Company Strategies
The corporate segment of the energy sector continues the restructuring of portfolios and the battle for promising assets. This week, it was reported that American Chevron expects a one-time loss of $200-400 million for the third quarter of 2025, associated with completing the acquisition of Hess. The $55 billion deal was finalised in July, granting Chevron control over significant oil fields in Guyana (one of the largest oil discoveries in recent decades), for which it competed with ExxonMobil.
The integration of Hess is accompanied by substantial one-time expenses – from severance payments to redundant employees to the revaluation of certain assets. Excluding these write-downs, the adverse impact on Chevron’s adjusted profits is assessed at a lesser amount ($50-150 million) for the quarter, indicating the high profitability of its core business. Additionally, Chevron reported an increase in cumulative production: in Q3 2025, the company expects to produce 450-500 thousand barrels of oil equivalent per day, factoring in contributions from the new assets.
Chevron's case illustrates that even during the energy transition, oil and gas giants continue to expand their resource base. Major mergers and acquisitions in the industry are driven by the desire to secure future production and market share. Earlier in 2023-2024, a series of such transactions occurred: ExxonMobil acquired shale producer Pioneer Natural Resources, Shell expanded its presence in the LNG sector, and several European companies invested in renewables. This trend reflects the dual strategy of the sector: on one hand, to maximize returns from traditional oil and gas in the coming years, and on the other, to prepare for a low-carbon future.
Investors are closely monitoring the financial results of such major deals. In Chevron's case, the markets reacted calmly to the news: one-time losses are viewed as an acceptable price for access to promising reserves. The company's shares have remained stable, with analysts noting significant production potential in the Guyanese blocks. At the same time, the management of oil companies faces the challenge of convincing shareholders that investments in long-term projects will yield returns despite the potential peak oil demand in the next decade and tightening environmental requirements.
Thus, an investment strategy for energy companies reveals a balance: revenues from current operations (oil, gas, petroleum products) are directed both towards shareholder returns and acquiring 'growth' assets and technologies. The fuel and energy sector is undergoing transformation under the influence of external challenges, yet it continues to offer growth opportunities for those players who can adapt to new market and regulatory realities.
