Key News from the Oil, Gas and Energy Sector for Sunday, December 21, 2025: Oil and Gas Markets, Energy, Renewables, Coal, Oil Products and Global Trends in the Energy Sector
Current developments in the fuel and energy complex (FEC) as of December 21, 2025, are capturing the attention of investors and market participants due to their contradictory signals. On the diplomatic front, shifts have begun to emerge: negotiations involving the USA, EU, and Ukraine took place in Berlin, instilling cautious optimism regarding a potential end to the protracted conflict—Washington has offered Kyiv unprecedented security guarantees in exchange for a ceasefire. However, concrete agreements have yet to be reached, and the stringent sanctions regime in the energy sector remains in place. The global oil market continues to face pressure from an oversupply and weakening demand: Brent crude prices have dropped to around $60 per barrel—the lowest level since 2021—reflecting the formation of a surplus. The European gas market is showing resilience; even at the peak of winter consumption, underground gas storage in the EU is nearly 69% full, while stable LNG and pipeline gas supplies keep prices at moderate levels.
Meanwhile, the global energy transition is continuing to gain momentum. Many countries are setting new records for generation from renewable sources, although traditional coal and gas plants still play a significant role in ensuring the reliability of energy systems. In Russia, after a summer peak in prices, authorities implemented tough measures (including an extension of the fuel export ban), stabilising the situation in the domestic oil products market. Below is a detailed overview of the key news and trends in the oil, gas, electricity generation, and raw materials sectors as of this date.
Oil Market: Oversupply and Weak Demand Pressure Prices
Global oil prices remain under downward pressure, reaching multi-year lows due to fundamental factors. North Sea benchmark Brent is trading around $59–60 per barrel, while US WTI is in the range of $55–57. Current levels are approximately 15–20% lower than a year ago, reflecting a gradual market retreat following the price peaks of the 2022–2023 energy crisis. Several key factors are influencing price dynamics:
- OPEC+ Supply: The oil alliance has largely maintained substantial supply volumes in the market. Previously voluntary production cuts were partially rolled back, and at the beginning of 2026, OPEC+ decided to keep current production levels unchanged without further increases. Participants in the agreement have stated their commitment to market stability and readiness to reduce production again if the oversupply intensifies. The upcoming OPEC+ meeting scheduled for January 4, 2026, is in the spotlight, with analysts expecting signals regarding possible cartel interventions to support prices.
- Demand Slowdown: Global oil consumption growth has noticeably weakened. According to updated forecasts from the International Energy Agency (IEA), global oil demand is expected to increase by only ~0.7 million barrels per day (down from +2.5 million in 2023). OPEC estimates demand growth at around +1.2–1.3 million bpd. The reasons include a slowing global economy and a previous period of high prices that encouraged energy conservation. China plays a notable role in damping demand: industrial and fuel consumption growth in the second half of 2025 fell below expectations due to an overall economic slowdown (industrial production growth dropped to the lowest levels in the past 15 months).
- Geopolitics and Sanctions: Rising expectations of a peaceful resolution in Ukraine add a 'bearish' factor to the oil market, as they suggest a full return of Russian volumes to the global market in the near future. Simultaneously, the sanction confrontation between the West and oil exporters has intensified: the US has introduced the harshest sanctions against Russian oil companies in recent years in the fourth quarter (including restrictions on transactions with the largest producers), which has already forced several Asian buyers to cut imports from Russia. Furthermore, Washington has taken an unprecedented step by declaring a 'blockade' on tankers carrying sanctioned oil heading to Venezuela and back, aiming to shut down alternative sales channels. While these measures temporarily reduce the availability of certain supplies, a significant portion of sanctioned oil continues to enter the market through shadow schemes, accumulating in floating storage and being sold at substantial discounts.
The combined impact of these factors is creating a persistent oversupply situation, keeping the oil market in a state of moderate surplus. Prices remain near the lower boundary of recent years and are not receiving impetus for either growth or sharp declines. Market participants are awaiting further signals—both from negotiations regarding Ukraine and from OPEC+ actions—that could shift the risk balance in oil prices.
Gas Market: Winter Demand Rises, But High Stocks Keep Prices in Check
In the European gas market, the focus is on passing the peak of the winter season. Cold weather in December has led to an increase in gas consumption; however, high storage levels and stable supplies helped to avoid sharp price fluctuations. According to Gas Infrastructure Europe, gas underground storage in the EU is currently filled to roughly 68–69%—this is lower than a year ago (about 77% on the same date) but still provides a significant supply buffer. Thanks to this, as well as record LNG imports and a steady inflow of pipeline gas from Norway, current demand is being met without issues. The European benchmark index (TTF) fluctuates around €25–30 per MWh, still significantly lower than crisis levels in 2022.
A slight increase in gas prices noted at the beginning of December was related to the first cold weather, but the market quickly stabilised. LNG terminal loads remain high—partly due to the full return of the US Freeport LNG plant to operation—which compensates for the seasonal demand increase. Concurrently, major traders have taken their largest 'short' positions in gas futures since 2020, effectively betting on continued price stability. This reflects confidence that stocks and supplies will suffice, yet experts warn that a sudden disruption in imports or an anomalous cold snap could change the situation. Given that stock levels this winter are somewhat lower than last year, any unexpected shock (for example, a technical failure or geopolitical incident) could quickly increase price volatility. Overall, however, the European gas market currently demonstrates balance: stable LNG and pipeline supplies keep prices in check, while authorities and energy companies have intensified monitoring to respond swiftly to potential threats to energy security.
International Politics: Dialogue for Peace Offers Hope, Sanction Pressure Persists
In the second decade of December, diplomatic efforts to resolve the conflict in Eastern Europe have noticeably intensified. On December 15–16, negotiations took place in Berlin involving special representatives from the US (from President Donald Trump's administration), Ukrainian leadership, and leaders of key EU countries. The American side proposed an unprecedented security guarantee scheme for Ukraine, comparable to NATO principles, in exchange for a ceasefire—a step that had not been openly considered before. For the first time since the war began in 2022, several European leaders cautiously welcomed this shift; they spoke about the prospect of at least a temporary ceasefire becoming 'conceptually visible'. German Chancellor Friedrich Merz noted the emergence of a 'real chance for a ceasefire', and Polish Prime Minister Donald Tusk stated that he had heard from American negotiators the willingness of the US to provide Ukraine with clear military guarantees in the event of new aggression. These signals have become the first rays of hope for a peaceful resolution to the largest conflict in Europe since World War II.
However, the path to durable peace remains complex. Moscow has yet to show readiness to make concessions: Russian officials have indicated that fundamental demands (including Ukraine's neutral status and territorial issues) remain in force. Kyiv, under significant pressure from Washington, is considering the potential for painful compromises, but publicly rules out the recognition of any territorial losses. Thus, negotiations continue, but there is no conclusive agreement—as a result, the existing sanctions regime remains unchanged. Moreover, in the absence of final progress, the West has not relaxed pressure: the US and its allies imposed new sanctions on the Russian oil and gas sector in the autumn, while the European Union at its last summit extended restrictions, stating their intention to adhere to price caps on Russian oil and oil products. Simultaneously, Washington has significantly increased military-political presence in the Caribbean, accompanying this with sanctions against shipping linked to Venezuela, effectively complicating the export of Venezuelan oil (a key ally of Moscow).
Markets are closely watching the developments in this dual situation. On one hand, the success of peace negotiations could eventually lead to a softening of sanctions and the return of significant volumes of Russian energy resources to the global market, improving global supply. On the other hand, the protraction or failure of dialogue threatens new rounds of sanction confrontation, which would maintain uncertainty and risk premiums in oil and gas prices. In the coming weeks, investor attention will be focused on whether the parties can transform current diplomatic initiatives into a concrete plan for peaceful resolution, or if sanction rhetoric will intensify again. Regardless, the outcome of the Berlin meetings and subsequent consultations will have long-term implications for global energy, determining the trajectory of relations between major powers and the operational conditions of the global FEC in a new geopolitical landscape.
Asia: India Faces Sanction Pressure, China Increases Production and Imports
- India: Facing increasing sanction pressure from the West, India is compelled to adjust its oil strategy. In the autumn, the US imposed direct restrictions on several major Russian oil companies, and by December some Indian refiners had halted purchases of Russian oil to avoid secondary sanctions. Specifically, the largest private oil refining company, Reliance Industries, suspended imports of Russian oil to its Jamnagar refineries as of November 20. This marks a sharp decline in Russia's share of Indian imports, which had been substantial since 2023. Nevertheless, New Delhi is not yet ready to completely abandon accessible Russian crude; supplies from Russia remain an important factor in energy security, especially given the offered discounts (estimated at $5–7 cheaper than Brent for Russian Urals). The Indian government is striving to balance compliance with sanctions and meeting domestic demand: schemes for payment of Russian oil in national currencies and involving non-sanctioned traders are being considered. Concurrently, India continues its long-term course to reduce imports. Following Prime Minister Narendra Modi's high-profile announcement on Independence Day regarding a large-scale deep-sea exploration programme, initial results have already emerged: the state company ONGC has drilled ultra-deep wells in the Andaman Sea, and the discovered hydrocarbon reserves are considered promising. The country is also actively investing in expanding refining capacity and alternative energy sources. All these steps aim to gradually reduce India's critical dependence on oil and gas imports.
- China: The largest economy in Asia continues to increase both energy resource imports and its domestic production, adapting to the changing environment. Chinese companies remain the leading buyers of Russian oil and gas—Beijing has not joined Western sanctions and is using the situation to import crude on advantageous terms. According to China's customs statistics, in 2024, the country imported approximately 212.8 million tons of oil and 246.4 billion cubic meters of natural gas, increasing volumes by 1.8% and 6.2%, respectively, compared to the previous year. In 2025, imports continued to grow, though at more moderate rates due to a high base and economic slowdown. Simultaneously, China is actively stimulating domestic oil and gas production: in the first three quarters of 2025, national companies extracted about 180 million tons of oil (approximately +1% year-on-year) and over 200 billion cubic meters of gas (+5% year-on-year). The expansion of its resource base partially offsets rising demand but does not eliminate dependence on external supplies—analysts note that China still imports approximately 70% of its required oil and about 40% of gas. The slowing Chinese economy in the second half of 2025 led to a decline in energy consumption growth rates (demand for oil products and electricity grew slower than expected), easing pressure on global raw material markets. Amidst this, Chinese authorities, seeking to balance the internal market, increased export quotas on oil products for their refineries at the year's end—this will allow excess fuel volumes (particularly diesel and gasoline) to be directed to external markets. Thus, the two largest Asian consumers—India and China—continue to play key roles in global commodity markets, combining import assurance strategies with the development of domestic production and infrastructure.
Energy Transition: Growth of Renewable Energy and the Role of Traditional Generation
The global transition to clean energy made further strides in 2025, accompanied by new records in the field of renewable energy sources (RES). In Europe, for the year, total generation from solar and wind power plants increased again, and, as in 2024, it exceeds the electricity output from coal and gas-fired plants. The commissioning of new renewable energy capacities continued at a rapid pace, especially in solar and wind energy: EU countries invested significant funds in 'green' generation while accelerating the development of grid infrastructure for integrating renewable sources. The share of coal in Europe's energy mix, which temporarily rose during the crisis of 2022-2023, is once again declining due to normalised gas supplies and environmental policies. In the USA, renewable energy also achieved historic performance: preliminary data indicate that over 30% of all electricity generated in 2025 came from RES. The combined volume of wind and solar generation in America exceeded production from coal plants for the first time throughout the year, reflecting the continuation of a trend that began in the early part of the decade. This achieved success despite efforts by the authorities to support the coal industry—the inertia resulting from previously planned RES projects and market factors (relatively low gas prices for most of the year) contributed to the further 'greening' of the US energy system.
China remains the leader in the development of renewable energy: this country adds tens of gigawatts of new solar panels and wind turbines annually, breaking its generation records. In 2025, China once again increased its installed renewable energy capacity to unprecedented levels—investments in the sector reached hundreds of billions of yuan. Concurrently, Beijing is actively developing energy storage technologies and modernising the energy grid to accept unstable generation. However, given its colossal energy consumption volumes, China continues to rely heavily on coal and gas for covering its baseload demand—making it the world's largest carbon emitter but also the primary market for introducing clean technologies. Analysts estimate that global investments in clean energy (renewables, storage, electric vehicles, etc.) in 2025 exceeded $1.5 trillion for the first time, outpacing investments in the fossil sector. The trend of decarbonisation is becoming one of the defining aspects of the global FEC: an increasing number of companies and financial institutions are committing to reducing emissions, redirecting capital towards low-carbon energy development projects. At the same time, the transition period requires balance—traditional energy sources continue to ensure the basic reliability of energy systems. Thus, the growth of RES goes hand-in-hand with maintaining sufficient capacities of traditional generation to ensure stable energy supply as the sector undergoes reform.
Coal: Global Demand at Record Levels, Market Remains an Important Part of Energy Balance
Despite the acceleration of the energy transition, the global coal market in 2025 is demonstrating sustained strength. According to the International Energy Agency (IEA), global coal demand has increased by another 0.5% this year, reaching approximately 8.85 billion tons—a new historical maximum. Coal remains the largest single source of electricity generation on the planet, heavily relied upon for energy systems in several Asian countries. Nevertheless, the IEA expects that over the next few years, coal demand will stabilise at a plateau and begin to gradually decline by 2030, as renewable energy, nuclear power plants, and natural gas gradually push coal out of the energy mix. Achieving global climate goals necessitates phasing out coal, which currently accounts for about 40% of global CO2 emissions from burning fuel. However, implementing these plans faces objective difficulties as the coal industry continues to support industrial operations and power grids in many regions.
An important feature of 2025 has been divergent trends in key coal-consuming countries. In India, for example, coal usage unexpectedly declined (for only the third time in the last 50 years)—this was aided by exceptionally abundant monsoon rains, allowing for record hydropower generation and fewer burdens on coal-fired plants. In contrast, US coal consumption increased: due to higher gas prices and measures by the Trump administration to support coal plants (including deferment of closures), coal regained a larger share in electricity generation. However, a decisive contribution to global figures is made by China, which accounts for around 55% of global coal consumption. In 2025, demand in China remained close to peak levels, although the commissioning of new renewable capacities is sufficient to curb further growth in coal combustion—forecasts suggest that coal consumption in China will begin to slowly decrease by the end of the decade. Overall, the coal market is currently in a state of relative equilibrium: mining and exports from major supplier countries (Australia, Indonesia, Russia, South Africa) consistently meet high demand, and prices remain at moderate levels without sharp spikes. The industry continues to be one of the pillars of global energy but is under increasing pressure from the environmental agenda.
Russian Oil Products Market: Situation Stabilises After Summer Crisis
The domestic fuel market in Russia is showing signs of normalisation by the end of the year following the emergency situation last summer. Recall that in August-September 2025, wholesale exchange prices for petrol and diesel reached record heights due to supply shortages amid peak agricultural activities and maintenance at oil refineries. The government had to intervene swiftly, introducing stringent restrictive measures. In particular, a complete ban on the export of automotive petrol and diesel fuel was implemented, initially planned until the end of September, which was extended several times. The last extension spread the embargo throughout the entire fourth quarter and until December 31, 2025. This measure guaranteed the redirection to the domestic market of about 200–300 thousand tons of motor fuel per month, which had previously been exported abroad. Concurrently, authorities intensified control over the distribution of oil products within the country: oil companies were instructed to prioritise meeting domestic market needs and to eliminate the practice of reselling fuel to one another through the exchange. The retention of the damping mechanism (reverse excise tax) and direct subsidies from the budget continue to compensate producers for lost income from sales in the domestic market, encouraging them to retain sufficient volumes for Russian consumers.
A complex of measures taken has already yielded results— the fuel crisis has been localised. By the beginning of winter, wholesale gasoline prices have retreated from their peaks, while retail prices at filling stations across the country have increased by less than 5% since the beginning of the year (which corresponds with the general inflation level). Filling stations are adequately supplied with fuel, and there are no interruptions in fuel deliveries to regions. The government states it remains ready to act preventively: if conditions worsen again, restrictions on the export of oil products can be immediately restored or extended, and necessary volumes of fuel will be quickly directed to the domestic market from reserves. Currently, the situation has stabilised—the domestic market has entered winter without shortages, and prices for end consumers are maintained within acceptable limits. Authorities continue to monitor the situation at the highest levels to prevent a repeat of last year's sharp fuel price increases and ensure predictability for businesses and the public.
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