Oil & Gas and Energy News, Tuesday, 2nd December 2025 — Negotiations Regarding Ukraine, Markets and COP30 Outcomes

Current News in the Oil, Gas, and Energy Sector as of 2 December 2025: Market Situation, Renewable Energy Updates, Geopolitics, Investments, and Key Events in the Global Energy Sector.

Oil Market

• At its November meeting, OPEC+ decided to maintain the existing production level for Q4 2025 and Q1 2026 unchanged. This decision implies the continuation of the current scheme of reductions (approximately 3.2 million barrels per day) amidst a forecasted slowdown in demand.
• The United States is producing a record amount of oil (~13.8 million barrels per day), while commercial oil inventories are rising. The increase in domestic stocks in the US and other countries is suppressing further global fuel price increases.
• Incident in Novorossiysk: Ukrainian drones damaged one of the Caspian Pipeline Consortium (CPC) berths, reducing oil supplies to the port. This incident momentarily decreased CPC exports (~1% of global) which caused temporary price fluctuations.
• Geopolitics: Negotiations regarding Ukraine remain a key factor. The prospect of a peaceful resolution could eventually ease sanctions against Russia and increase oil and gas supplies. Simultaneously, the risk of new restrictions and asset reconfigurations keeps the industry in a state of uncertainty.

Gas Market

• European inventories: As of the start of the heating season 2025/26, EU gas storage facilities are filled to approximately 75–80% of capacity, significantly above average levels. This reduces the risk of gas shortages and keeps prices low (TTF ~€30/MWh).
• LNG imports: Europe is actively increasing its liquefied natural gas (LNG) imports. The commissioning of new terminals in the US and Australia, coupled with reduced demand from Asia, has provided additional LNG volumes for the EU. In 2025, LNG flows into Europe substantially increased, helping to diversify supply.
• Russian supplies: Russia is shifting focus to Asian markets. Exports via the Power of Siberia to China are growing, and the Power of Siberia-2 project is expected in 2026. Gazprom is negotiating contract extensions with Turkey while maintaining exports via the Turkish Stream. Traditional routes to Europe are still operating through reduced channels.
• Domestic demand: In Germany, gas consumption has significantly increased due to a decline in wind and hydro power production. This is slowing down storage filling and creating local price pressure in the region, although the European system overall is receiving necessary imports.

Electricity and Renewable Energy Sources (RES)

• Record growth in RES: Renewable energy sources are adding capacity at unprecedented rates. Solar and wind generation in many countries have surpassed the growth rates of electricity demand, resulting in the first stabilisation of global CO₂ emission levels. China and the US remain leaders in expanding "clean" energy, while Europe is gradually adjusting its support programmes.
• Investment in infrastructure: Following COP30, global energy companies and governments have announced plans for substantial funding aimed at network modernisation and storage systems. Energy giants alone have pledged to invest around $148 billion annually in new transmission lines and energy storage systems, facilitating better integration of variable energy sources.
• EU policy: Brussels continues its push towards energy independence. New measures under REPowerEU have been adopted to gradually phase out imports of Russian gas and oil by 2027, extend storage filling requirements until the end of 2027, and increase financing for energy efficiency and clean energy projects. Discussions are ongoing regarding the accelerated construction of new renewable energy projects and networks.
• Nuclear programme: Despite the emphasis on "green" energy, countries are not abandoning nuclear energy. A recently published EU report indicates that investments in nuclear power plants (extending operational lifespans and building new ones) will require around €241 billion by 2050. Concurrently, plans for small modular reactors (SMRs) and hydrogen technologies are being developed as "bridges" to a carbon-free economy.

Coal Sector

• Long-term contracts in Asia: Many countries in the Asia-Pacific region continue to heavily rely on coal consumption. Agreements made years ago guarantee the operation of coal-fired power plants for decades, regardless of wind or solar availability. Experts estimate that coal still supplies a significant portion of generation in Southeast Asia, although the global share of coal is gradually declining.
• Global trends: Despite this, several major economies have announced a phased withdrawal from coal. The Chinese market is showing early signs of emission reductions thanks to record renewables deployment; in 2025, its coal emissions fell for the first time. South Korea, India, and several European countries have announced new targets to reduce the share of coal generation and enhance the role of "clean" energy.
• Climate commitments: The final COP30 document did not directly mention "coal" (under pressure from exporting countries), but individual nations announced their own measures. South Korea, for instance, will stop building new coal-fired power plants and gradually close existing ones. Additionally, an international methane reduction fund was launched at the summit (£25 million contribution), indirectly signalling a shift toward cleaner energy sources.

Oil Products and Refineries

• Changing demand: The demand for oil products is shifting unevenly. Diesel and jet fuel are recovering faster due to increased freight transport and the resumption of air travel, whereas gasoline demand is rebounding more slowly. This shift in demand is causing refineries to adapt production outputs (increasing the share of diesel and jet fuel).
• Refining: Refineries in Asia and the Middle East are operating at near-full capacity due to high crude supply. This bolsters confidence in oil product exports, but margins are being suppressed by the excess of crude. In Europe, some refineries have shifted to processing grades of oil unaffected by sanctions, yet overall refinery utilisation remains high.
• Sanctions: Restrictions on Russian oil products continue to impact the balance. The EU and US have imposed bans on imports of diesel and kerosene from Russia, forcing some refineries to seek alternative supplies. These measures are keeping prices in check amidst a surplus of crude while simultaneously prompting companies to accelerate the development of alternative fuel types and comprehensive waste product recycling.

Companies and Investments

• Exploration and projects: Europe is gradually easing drilling restrictions. In Greece, a licence for an offshore gas field has been issued for the first time in 40 years to Exxon/Energean, while Shell and Chevron in Italy and the UK have received or are awaiting approval for the expansion of existing fields. These steps reflect a new approach to domestic resource exploration.
• M&A deals: Activity in the segment is high. For instance, Targa Resources has acquired gas transport assets in the Permian Basin for $1.25 billion, strengthening its pipeline network in the US. Oil traders (like Gunvor and Vitol) are considering participation in US shale projects, aiming to diversify their portfolios and secure long-term fuel supplies.
• LNG projects: Investors are reassessing long-term commitments. The UK government has refused to finance $1.15 billion for an LNG project in Mozambique due to security risks and changing global agendas. TotalEnergies is preparing to resume work on this project, but timelines and funding amounts are subject to review.

Geopolitics and Regulation

• Sanctions and agreements: Negotiations concerning Ukraine continue to set the tone for the market. While no specific agreement has been reached yet, discussions have included plans for further tightening sanctions against Russia post-2025. The EU has already extended mandatory gas storage filling norms until the end of 2027 and announced new incentive measures for "green" projects, seeking to ensure energy independence.
• International cooperation: G20 countries and COP30 participants have agreed to increase financing for climate programmes. Estimated needs to assist developing countries in achieving climate goals by 2030 reach $2.4 trillion annually. China and India have confirmed their readiness to play a key role in expanding renewable energy, while developed countries have promised additional investments in clean technologies.
• Regional initiatives: New organisations are forming at the union level. The EU has created a Platform for Energy and Raw Materials for the collective procurement of critical resources (hydrogen, natural gas, etc.). Collaboration in Asia is increasing to establish regional gas markets and develop "green" funds. Many countries are developing national decarbonisation roadmaps, introducing tax and subsidy incentives for the transition to clean energy.
• Technological regulations: Concurrently, emission regulations are being refined. The US is tightening methane emission standards in oil and gas fields, while the EU is advancing support mechanisms for clean energy through carbon pricing and quotas. These measures aim to expedite the transition towards a "green" agenda and influence investment strategies among companies worldwide.