Overview of the Fuel and Energy Sector News (FES) as of November 4, 2025: OPEC+ Decisions, Sanctions Against Russia, Record LNG Exports from the USA, EU Climate Policy, and Renewable Energy Development. Analysis of Key Events in the Global Energy Market.
Oil Market: OPEC+ Decisions and Price Dynamics
The global oil market displays cautious optimism amid the latest decisions from OPEC+. The **Organization of the Petroleum Exporting Countries and its allies** agreed on Sunday to slightly increase production in December (approximately by 137 thousand barrels per day), while also deciding to take a pause in the first quarter of 2026. This move aims to prevent a potential surplus in supply at the beginning of next year. Concurrently, *oil prices* have stabilised at relatively low levels: **Brent** remains around $64–65 per barrel, while the American **WTI** hovers near $60. The market is balancing the impact of additional barrels from OPEC+ on one hand, and the decision to pause production on the other, whilst also considering concerns over excessive inventories and weak economic data from Asia.
- OPEC+ Increases Production in December: Eight members of the alliance received permission to raise the total quota to approximately 33.15 million barrels per day, compensating for previous restrictions.
- Pause in 2026: OPEC+ will not increase supply in January-March, signalling a desire to support prices and avoid a market “crash” at the start of the year.
- Stabilisation of Prices: News of the pause has helped prevent a sharp decline in quotes; analysts note that the alliance is carefully monitoring the market situation and is prepared to swiftly change tactics for the sake of price stability.
Several investment banks have revised their oil forecasts upwards: the OPEC+ decision is seen as a sign that the cartel will defend **oil prices** from excessive declines. Some analysts expect that the average price of **Brent** will hold around $60 per barrel in the first half of 2026. A similar view is shared within OPEC itself – the Secretary-General of the organisation noted that he sees "healthy signs of demand" and does not anticipate surprises in the market, as producers intend to maintain the balance between supply and demand.
Sanction Pressure and Restructuring of Export Flows
Geopolitical factors continue to significantly influence fuel markets. At the end of October, Western countries expanded sanctions against the Russian oil sector, leading to a **restructuring of oil export flows**. The sanctions from the US and UK targeted the largest Russian oil companies – "Rosneft" and "Lukoil", which together accounted for approximately 5% of global oil production. The new sanctions require counterparties to cease cooperation with these companies within 30 days under the threat of secondary measures. In response, major importers have started reducing imports of Russian oil:
- Chinese Refineries Reject Russian Crude: According to industry sources, state-owned companies **Sinopec** and **PetroChina** cancelled part of their November loadings of Russian oil following the imposition of sanctions. Additionally, several independent Chinese processors ("teapot" refineries) in Shandong Province have halted purchases, fearing a loss of access to dollar transactions. As a result, daily deliveries of crude oil from Russia to China have fallen by approximately 400 thousand barrels per day (nearly 45% from recent levels) – marking the largest reduction since the start of the conflict in 2022.
- India and Turkey Seek Alternatives: Indian refineries, previously active in purchasing cheap Russian oil, have reduced their imports by about half over the past month. Instead, Indian companies have ramped up purchases of crude from the Middle East – from **Iraq**, **Kazakhstan**, and **Brazil**. A similar trend is observed in Turkey: Turkish refineries are diversifying their sources of oil to avoid sanctions and maintain their export markets.
- Decline in Exports and Prices: Exports of oil products from Russia have also plummeted. Attacks from Ukrainian drones over the summer damaged infrastructure – refineries and ports – which already cut marine supplies of diesel and fuel oil from Russia. Now, the sanctions have exacerbated the situation: according to traders, oil product exports in September dropped to approximately 2 million barrels per day – the lowest in over five years. Prices for Russian oil grades (such as ESPO for the Asia-Pacific region) are under severe pressure and are trading at an increasing discount, limiting Moscow's foreign currency revenue.
Official representatives in Russia, however, are trying to maintain optimism. Deputy Prime Minister Alexander Novak stated in an interview that "despite unprecedented sanctions pressure, oil supplies to the People's Republic of China remain at last year's levels," and exports of Russian gas to China via the "Power of Siberia" pipeline have increased by 31% over the first nine months of 2025. Nonetheless, experts note that the tightening of sanctions is already forcing traditional Asian partners of Russia to reduce cooperation. From January 1, 2026, an **EU** embargo on imports of oil products made from Russian oil will also come into effect – this step will close the loophole that allowed Russian oil to indirectly enter European markets through processing in third countries. All of this means that the Russian oil industry will have to shift to more complex and costly sales routes. In contrast, the largest Western competitors are benefiting: the reduction of supply from Russia supports global refining margins, and traders are capitalising on the volatility of supplies.
Demand Forecasts: Confidence in Growth Despite Surplus Concerns
Despite discussions of an oil surplus in 2026, many market participants are confident that **global demand for energy resources** will remain high. Executives of leading oil and gas companies, gathered at the ADIPEC industry forum in Abu Dhabi, challenged forecasts of an imminent oversaturation of the oil market. Claudio Descalzi, the head of Italian company Eni, emphasised that the global oil industry has been under-invested by about half the necessary funds for production over the past 10–12 years: "Demand is growing, and we do not have sufficient supply and investments to meet it." According to Descalzi, it is premature to talk about an "oversupply" of oil in 2026 – on the contrary, the investment deficit may limit supply.
Optimism is also shared by French **TotalEnergies**. Its CEO, Patrick Pouyanné, noted that global demand for oil continues to increase by approximately 1% annually. Although consumption growth in China has slowed to half the levels seen five years ago, **India** is emerging as the new engine for demand growth. Thus, the slowdown in the Chinese economy is partially offset by the active development of other Asian markets. Pouyanné also warned that if oil prices fall too low due to concerns about oversupply and investments are reduced again, the world could face a deficit and a new cycle of rising prices – the cyclical nature of the industry remains unchanged.
Murray Auchincloss, head of **BP**, added that the explosive growth of oil supplies outside OPEC+, observed this year, might taper off by spring 2026. BP estimates that the increase in supply from independent producers (primarily from North and South America) will halt by March-April, after which production outside OPEC+ will either stabilise or decline. In this regard, long-term market equilibrium will largely depend on OPEC+ policies and the actions of the largest consumers. According to Auchincloss, the cartel has limited available capacity but is trying to manage it wisely. It is worth noting that OPEC itself officially predicts a relatively balanced oil market in 2026: robust growth in global demand is expected, while increases in production outside the alliance will significantly slow down. In contrast, experts from the **IEA** (International Energy Agency) warned just a month ago of a possible oil surplus next year of up to 4 million barrels per day if all announced projects reach full capacity. Reality, as usual, will likely fall somewhere in between, but the sentiments of oil and gas executives suggest that the industry currently has more faith in sustained demand than in a supply surplus.
Investments in Energy: New Challenges and Infrastructure
A key theme in the industry is the lack of investment and the new needs for energy infrastructure. Experts believe that **long-term energy demand** will increase across all segments; however, the industry faces the challenge of investment lagging behind needs. At the same ADIPEC forum in the UAE, Energy and Technology Minister Sultan Al Jaber (head of ADNOC) stated that the energy sector is entering an era where "volatility has become the new norm." Geopolitical tensions and economic uncertainties make price and demand fluctuations commonplace, yet the overarching trajectory remains upward: according to Al Jaber, global **oil** consumption will remain above 100 million barrels per day even after 2040, and demand for all forms of energy will only increase as populations and economies grow.
To meet this demand while simultaneously adapting to technological changes, colossal investments are required. According to Al Jaber’s estimates, **approximately $4 trillion in annual investment** is needed globally in the energy sector – from hydrocarbon extraction and the development of renewable energy sources to modernising power grids and establishing data storage infrastructure. New trends, such as the rapid growth of digital technologies, only intensify the pressure on the energy system: data centres, artificial intelligence, and widespread electrification all demand increasing amounts of electricity. For instance, the rapid increase in the number of data centres and computational power leads to a spike in electricity consumption, creating additional demand for *gas and coal* for generation if renewable sources’ capacities fall short.
However, infrastructure development is not currently keeping pace with this growth. Al Jaber highlighted a concerning example: the world is facing a shortage of gas turbines for power plants, resulting in "bottlenecks" in generation in several regions. This has already led to local spikes in electricity prices, as producers are unable to ramp up capacity in line with demand. Countries and companies are forced to seek a balance between financial discipline and capital investment – for a lack of investments today could lead to an energy deficit tomorrow. Experts urge governments to create conditions conducive to capital flows into the energy sector, reducing risks for investors. This involves mobilising "dormant capital" currently tied to traditional assets, redirecting it towards new projects: modernising power grids, building flexible generating capacities, and developing energy storage systems. Only then, specialists believe, will it be possible to maintain a balance between growing energy demand and supply in the future.
Gas Market and LNG: Record Exports and Winter Prospects
Significant shifts are observed in the global natural gas market: **the United States** has set a new record for liquefied natural gas (LNG) exports. According to analytics firm LSEG, in October, the USA exported more than 10 million tonnes of LNG for the first time in history (around 10.1 million tonnes, compared to 9.1 million tonnes in September). The American LNG sector rapidly ramps up sales thanks to new capacities coming online: the main contribution to October's jump came from the launch of the new **Venture Global Plaquemines** export terminal in Louisiana and the expansion of facilities by **Cheniere Energy** (the Corpus Christi Stage 3 project). These two operators accounted for about 72% of the total US exports in October, supplying the global market with nearly 7.2 million tonnes of LNG in that month.
Key destinations remain **Europe** – receiving 6.9 million tonnes of American LNG in October, or 69% of the total volume. European consumers are actively purchasing gas on the spot market, filling storage ahead of the winter period. Gas reserves in storage facilities across EU countries are already nearing record-high levels, which should help Europe navigate the upcoming heating season relatively confidently. The share of Asia in American exports has also increased (approximately 1.96 million tonnes of LNG in October were sent to Asian countries, compared to 1.63 million tonnes the previous month), yet the *price factor* keeps the main flow of gas directed towards Europe. The average gas prices at key hubs are almost on par: in October, the spot price at the European **TTF** was about $10.9 per million British thermal units, while the Asian **JKM** index stood at around $11.1. Such a minimal premium difference does not incentivise suppliers to divert LNG to the further Asian market if there is demand in Europe nearby. Furthermore, in Latin America (another sales market), demand seasonally decreased – in October, only around 0.6 million tonnes of American LNG were exported there as South American countries enter the summer period and reduce imports.
Thus, the **European Union** has solidified its status as the main client of the US for liquefied gas, particularly after gas supplies from Russia have virtually ceased. The course towards diversification of energy supply sources within the EU will continue: in addition to the USA, the roles of Qatar, Africa, and other exporters are increasing. As winter approaches, Europe is well-positioned with high reserves and expanded infrastructure for receiving LNG (new floating terminals have been introduced in Germany and other countries over recent years). Nonetheless, specialists warn that the *situation in the gas market* remains vulnerable to potential cold weather or new unforeseen circumstances. In case of a severe winter, prices may rise, but under milder conditions, Europe is counting on traversing the season without disruptions, given the record reserves and steady inflow of LNG.
EU Climate Requirements and Supplier Reactions
The interaction between the global climate agenda and the interests of energy companies is intensifying. The **European Union** is promoting new regulatory norms in the field of sustainable development, which draw criticism from major energy resource suppliers. This pertains to the EU Corporate Sustainability Due Diligence Directive, which stipulates that all large companies doing business in Europe must submit a plan to achieve the objectives of the Paris Agreement (keeping warming within 1.5°C) and take into account environmental and human rights risks across their supply chain. Failure to comply with these requirements could result in fines of up to 5% of a company's global revenue.
At the industry forum in Abu Dhabi, executives from two key gas suppliers for Europe – **ExxonMobil** and **QatarEnergy** – warned that if the directive is adopted in a stringent form, they may reconsider their operations in Europe, potentially exiting the market entirely. ExxonMobil’s CEO Darren W. Woods stated that the new rules in their current formulation could have "catastrophic consequences" for business: according to him, the requirement to align operations with *Net Zero* goals worldwide is technically unfeasible within the specified timeframe. The top manager is particularly concerned about provisions that allow European regulations to be applied to the company's operations even **outside of Europe**, when Exxon has business there. "If we are put in a situation where it is impossible to operate successfully, we will have to leave," Woods summarised, emphasising that the oil and gas business is inherently global, and EU decisions should not paralyse the operations of companies worldwide.
A similar position was expressed by the Minister of Energy of Qatar, Saad Al-Kaabi (who also heads QatarEnergy). He reaffirmed that the threat to suspend Qatari LNG supplies to Europe is "not a bluff." According to Al-Kaabi, imposing excessively stringent carbon footprint reduction requirements makes it impossible to continue business in the European Union: "We will not be able to achieve net zero in supplies – this is one of the unfeasible conditions, not to mention several others." The Qatari minister noted that **Europe needs gas** – both from Qatar and from the USA and other countries, and therefore the EU should take the concerns of suppliers "very seriously." Al-Kaabi highlighted that Qatar has been a reliable partner for Europe for many years and is ready to remain so, but only under conditions of fair competition and reasonable regulation. Interestingly, the governments of Qatar and the USA have already reached out to EU officials urging them to reconsider the provisions of this directive that threaten the stability of European energy supplies. In response, Brussels has signalled a willingness to engage in dialogue: the text of the law is planned to be revised by the end of the year, softening the most contentious points.
Both suppliers and officials agree on one point: the **energy transition** must be realistic. Achieving climate goals is crucial, but demanding immediate transformation of all business processes from oil and gas giants risks supply disruptions. European consumers are significantly reliant on supplies from ExxonMobil and QatarEnergy. Currently, American producers account for about half of LNG imports into the EU, while Qatar provides another 12–15%. After the exit of Russia from the market, the importance of these countries has only increased. Thus, the EU must find a balance between stringent climate policy and guarantees of energy security: likely, the regulations will be softened to prevent key partners from abandoning the European market.
Integration of Renewable Energy: China's Experience and Infrastructure Limitations
**Renewable energy sources** are playing an increasingly significant role in the global energy balance, yet their large-scale implementation faces infrastructure constraints. A prime example is **China**, which leads in the installation of new solar and wind generation capacities. Nevertheless, a recent report from consulting firm Wood Mackenzie warns that over the next decade, China expects an increase in what is termed **curtailment** of generation at renewable energy sites, posing risks to the profitability of projects. To maintain grid stability, operators often have to disconnect part of the generation from solar and wind farms during periods of excess generation or low demand. As a result, analysts predict that the average level of curtailment for **solar energy** may exceed 5% in 21 provinces over the next ten years (for comparison, in 2025 such levels were noted in only 10 provinces). The situation with wind energy appears somewhat better but is still challenging: losses of over 5% in wind generation are expected in seven provinces (compared to 14 regions where this was observed in the current year).
High curtailment levels mean that portions of generated "green" energy are wasted due to limited functionality of the grid infrastructure. This deters investors: regions frequently experiencing renewable energy generation outages attract fewer new projects, especially considering China’s transition to a new tariff system (auction model instead of fixed tariffs for renewable electricity). Recognising the issue, **Beijing** has adjusted regulations: the permissible level of unused renewable energy has been raised from 5% to 10%, acknowledging the complexity of fully integrating growing capacities. However, even 10% is a significant proportion, and authorities intend to focus on addressing this challenge in the upcoming five-year plan (2026–2030). At a recent press conference, representatives from China’s National Energy Administration underscored that the priority would be to ensure maximum incorporation of *renewable generation* into the grid. This includes measures such as promoting direct contracts between renewable energy producers and major consumers (corporate PPAs), building additional transmission lines to transport energy from rich renewable regions to demand centres, and developing the concept of "virtual power plants." The latter envisages integrating distributed energy resources and storage into a single managed system, allowing the grid to respond more flexibly to fluctuations in generation.
China’s experience highlights a global challenge: alongside the construction of solar parks and wind farms, it is necessary to modernise **electric grids** and implement energy storage systems. Without this, the share of renewables will grow hesitantly, and dependence on traditional sources (gas, coal) will persist longer. Thus far, despite record pacing of clean capacity installations, the world’s largest economy still has to maintain a substantial reserve of traditional generation to cover peak loads when solar or wind resources are insufficient, or when an excess cannot be consumed. Analysts note that global demand for **coal** and **gas** remains high precisely because of these constraints: until infrastructure allows for a complete replacement of hydrocarbon fuels, older energy sources will play a backup role. However, according to IEA forecasts, global demand for coal is nearing its peak and is expected to stabilize with subsequent decline in the coming years. Many countries – from China to European powers – are targeting gradual reduction of coal use for environmental reasons. But the transition will be smooth: in the short term, coal generation still covers basic needs in many regions.
Thus, the global fuel and energy sector faces a dual challenge: there is a need to accelerate the **energy transition** while also preventing energy shortages. Investments in grids, storage, and modern management technologies must proceed hand in hand with the growth of renewable energy shares. Examples from both Europe and China demonstrate that without a comprehensive approach, achieving sustainable development in the industry is challenging. Nevertheless, as seen across all sectors – from oil and gas to electricity and renewables – global demand for energy will only continue to rise. This means that companies and governments must find new equilibrium points between environmental objectives and the real needs of the economy while maintaining investment in the reliability and diversification of the energy system.
