Current News from the Fuel and Energy Complex as of 4 December 2025: Decline in Brent Oil Prices, Stability of the European Gas Market, EU Sanctions, Fuel Export Restrictions in Russia, Renewable Energy Development, and the Situation in Asia. Comprehensive Analysis for Investors and Industry Stakeholders.
The latest developments in the fuel and energy complex (FEC) as of 4 December 2025 reveal a mixed picture on global markets amid attempts at geopolitical de-escalation. World oil prices have dropped to their lowest levels in recent months, with Brent crude falling to $62 per barrel, and U.S. WTI at approximately $59. These figures are significantly lower than mid-year levels and reflect a combination of factors ranging from cautious hopes for progress in peace negotiations to signs of an oversupply scenario. Conversely, the European gas market is entering the winter season relatively calmly: underground gas storage facilities (UGS) in EU countries are filled to over 85%, providing a solid buffer, while wholesale prices (TTF index) are being maintained below €30 per MWh, which is considerably lower than the peak values of previous years.
At the same time, geopolitical tensions persist: the West is ramping up sanctions pressure on the Russian energy sector – the European Union recently agreed to a legislative ban on imports of Russian gas by 2027, while simultaneously pushing for a reduction in the use of oil from Russia. Diplomatic efforts to resolve the conflict have yet to yield tangible results, thus restrictions and supply risks remain. Within Russia, authorities are extending emergency measures to stabilise the domestic fuel market following an autumn shortage of gasoline and diesel, tightly restricting the export of oil products. At the same time, global energy is accelerating its “green” transition: investments in renewable energy are hitting record highs, and new incentives are being introduced, although traditional resources – oil, gas, and coal – still form a key part of the energy balance for many countries.
Oil Market: Oversupply and Hopes for Peace Weigh on Prices
By the start of December, global oil prices had decreased to multi-month lows, affected by multiple factors. The North Sea Brent blend, after relative stability in the autumn, fell to around $62 per barrel, while U.S. WTI dropped to approximately $59. Current prices are significantly lower than mid-year levels and about 15% less than year-ago values, reflecting a weakening outlook for the oil market. The dynamics of prices have been influenced by a combination of factors:
- Hopes for conflict resolution: The market is pricing in the possibility of a relaxation of restrictions on Russian oil should peace negotiations between Moscow and Washington be successful. A recent meeting between U.S. representatives (Special Envoy Steven Vitkoff and Adviser Jared Kushner) and the Russian president has instilled cautious optimism among investors regarding a potential de-escalation, temporarily reducing the geopolitical “premium” in prices.
- Concerns over oversupply: Fears of overproduction are escalating amid indications of increasing inventories. According to the American Petroleum Institute (API), commercial crude oil inventories in the U.S. increased by 2.5 million barrels during the last week of November, while gasoline and distillate inventories rose by 3.1 million and 2.9 million barrels respectively. Moreover, the seasonal decline in demand at year-end and the slowing Chinese economy are limiting oil consumption growth.
- OPEC+ Decisions: The oil alliance, at its meeting on 30 November, decided for the first time in a long while not to change production quotas, maintaining them unchanged for the first quarter of 2026. OPEC+ countries indicate that they are in no rush to reclaim lost market share, fearing the formation of an oil surplus. Maintaining existing production constraints supports a fragile balance and prevents a more significant price drop.
- Military Risks and Incidents: Ongoing drone attacks in the Black Sea and on Russian pipeline infrastructure have periodically reminded the market of supply disruption risks. At the end of November, Ukrainian strikes disabled one of the external terminals of the Caspian Pipeline Consortium (CPC) in the Black Sea (Kazakhstan's oil exports have been partially restored since then), while a Russian tanker was damaged by an attack in the Bosphorus Strait. However, overall, these incidents have only temporarily supported prices, failing to disrupt the prevailing downward trend.
As a result, the cumulative impact of these factors has shifted the market balance towards oversupply. Oil prices remain under pressure, fluctuating near local lows as market participants assess the likelihood of a forthcoming peace settlement and OPEC+'s next moves in response to the changing circumstances.
Gas Market: Winter Begins with Comfortable Stocks and Moderate Prices
The natural gas market in Europe is maintaining a relatively favourable situation ahead of the peak winter consumption period. Due to timely injections and a mild start to the season, EU countries enter December with filled storage facilities and restrained prices, reducing the threat of a recurrence of the crisis seen in 2022. Key factors determining the current dynamics of the European gas market include:
- High UGS Fill Levels: According to Gas Infrastructure Europe, the average level of gas storage in the EU exceeds 85%, significantly above the average for the start of winter. The accumulated reserves create a “safety cushion” in case of harsh weather and allow for compensation of reduced gas inflows from traditional sources.
- Record LNG Imports: European consumers have continued to actively increase their purchases of liquefied natural gas (LNG). The weakened demand for LNG in Asia has freed up additional volumes for Europe. As a result, LNG supplies remain high, partially substituting for the shortfall in pipeline gas from Russia, and helping to keep prices comparatively low.
- Moderate Demand and Diversification: Relatively warm weather in early winter and energy-saving measures are curbing gas consumption growth. Simultaneously, the EU is diversifying supply sources: increased imports of gas from Norway, North Africa, and from other routes, decreasing dependence on a single supplier and bolstering energy security in the region.
- Price Stabilisation: Wholesale gas prices in Europe have stabilized significantly below the peaks of last year. The Dutch TTF index fluctuates around €28 per MWh, nearly three times lower than the extreme levels of autumn 2022. Filled storage and a balanced market have helped avoid sharp price spikes even amid a reduction in Russian imports.
Thus, the European gas market is entering winter with a buffer. Even in the case of colder weather, the accumulated reserves and flexibility of supplies via LNG should mitigate potential shocks. However, in the long term, the situation will depend on weather conditions and global competition for gas, especially if demand in Asia rebounds.
Russian Market: Fuel Shortages and Extension of Export Restrictions
In autumn 2025, Russia faced an acute shortage of automotive fuel (gasoline and diesel) amid a combination of internal and external factors. Increased seasonal demand (the harvest campaign required more fuel) coincided with a reduction in supply from refineries, some of which reduced output due to unscheduled downtime and drone attacks. Several regions experienced fuel supply disruptions, prompting authorities to intervene urgently in the market.
- Ban on Gasoline Exports: The Russian government imposed a temporary total ban on the export of automotive gasoline by all producers and traders (excluding supplies under intergovernmental agreements) at the end of August. Initially intended to last until October, this measure has since been extended at least until 31 December 2025 due to sustained tension in the domestic market.
- Restriction on Diesel Exports: Simultaneously, until the end of the year, the export of diesel fuel for independent traders has been prohibited. Oil companies with their own refineries have retained the possibility of limited diesel exports to avoid halting processing. This partial ban aims to maintain sufficient diesel supply within the country and prevent shortages.
According to statements by Deputy Prime Minister Alexander Novak, the emerging deficit is of a local and temporary nature: reserve stocks are being utilised, and refining is gradually recovering after unexpected downtimes. By the start of winter, the situation has somewhat stabilised – wholesale gasoline and diesel prices have retreated from the peak values of September, although they are still above last year’s levels. Authorities emphasise that ensuring the saturation of the domestic market and preventing a fuel crisis is the priority, hence stringent export restrictions may be extended into 2026 if necessary.
Sanctions and Policy: Western Pressure Intensifies, Ceasefire Delayed
The collective West continues to tighten its approach towards the Russian fuel and energy sector, showing no signs of easing sanctions. On 3 December, EU leaders definitively agreed to a plan for a complete and permanent cessation of Russian gas imports by 2027, as well as an accelerated phasing out of remaining oil supplies from Russia. This move is legally enshrined and aims to deprive Moscow of a significant portion of its export revenues in the medium term. Hungary and Slovakia, which are heavily dependent on Russian resources, opposed the initiative, but their objections did not prevent the decision from being made at the EU level.
Simultaneously, the U.S. is intensifying its own pressure: the new administration has taken a hard stance towards countries interacting with Russia in the energy sphere. Specifically, Washington has signalled the possibility of tightening sanctions policy against Venezuela, leading to uncertainty surrounding future Venezuelan oil supplies. Russian-American negotiations aimed at ending the conflict remain stalled – recent consultations in Moscow involving U.S. emissaries did not yield a breakthrough. Hostilities in Ukraine continue, and all previously imposed restrictions on the export of Russian energy carriers remain in force. Western companies still avoid new projects and investments in Russia. Thus, the geopolitical confrontation surrounding energy persists, adding long-term risks and uncertainties for the market.
Asia: India and China Focus on Energy Security
The largest developing economies in Asia – India and China – continue to prioritise their energy security, balancing the benefits of cheap imports against external pressures.
- India: Under Western pressure, New Delhi temporarily reduced imports of Russian oil at the end of autumn; however, India remains one of Moscow's key clients overall. Indian refineries are actively utilising discounted Urals oil to fully meet domestic fuel needs while exporting excess oil products. President Putin's visit to New Delhi, beginning today, is aimed at strengthening energy cooperation – new agreements on oil supplies are expected along with discussions on gas sector projects and other sectors.
- China: Despite economic slowdown, China retains a crucial role in the global energy market. Beijing is diversifying its import channels: additional long-term contracts for LNG purchases (including with Qatar and the US) are being signed, pipeline gas imports from Central Asia are being expanded, and investments in overseas oil and gas production are increasing. At the same time, the country is gradually boosting its own hydrocarbon production, although this is currently insufficient to fully meet domestic demand. China also continues to purchase coal to secure its energy system during this transition period.
Both India and China are concurrently investing heavily in the development of renewable energy; however, in the coming years, they do not intend to abandon traditional hydrocarbons. Oil, gas, and coal continue to form the foundation of their energy balance, and ensuring stable supplies of these resources remains a strategic priority for these Asian powers.
Renewable Energy: Record Investments and Ambitious Goals
The global transition to clean energy continues to gain momentum, setting new records for investments and installed capacities. In 2025, global investments in “green” energy are expected to exceed $2 trillion, more than double the total investments in the oil and gas sector over the same period, according to the International Energy Agency (IEA). The main stream of capital is directed towards the development of solar and wind generation, as well as the associated infrastructure – high-voltage power grids and energy storage systems.
At the COP30 climate summit, world leaders reaffirmed their commitment to accelerating emissions reductions and significantly increasing renewable energy capacity by 2030. To achieve these goals, a comprehensive set of initiatives has been proposed:
- Acceleration of permitting processes: Shortening the timelines for consideration and simplifying the issuance of permits for the construction of solar and wind power plants, modernising grids, and other low-carbon projects.
- Expansion of government support: Introduction of additional incentives for “green” energy – special “green” tariffs, tax benefits, subsidies, and government guarantees aimed at attracting investment and reducing risks for businesses.
- Financing the transition in developing countries: Increasing international financial assistance to emerging market countries to accelerate the deployment of renewables where domestic resources are insufficient. Targeted funds are being created to make “green” projects more affordable in economically vulnerable regions.
The rapid growth of renewable energy is already noticeably changing the structure of global energy consumption. According to analytics centres, non-carbon sources (renewables and nuclear) account for over 40% of electricity generation worldwide, and this figure is steadily increasing. Experts note that while short-term fluctuations may occur due to weather factors or demand spikes, the long-term trend is evident: clean energy is steadily displacing fossil fuels, bringing the global economy closer to a new low-carbon era.
Coal: High Demand Keeps the Market Afloat
Despite efforts towards decarbonisation, the global coal market in 2025 remains historically large. Global coal consumption is holding at record levels – approximately 8.8 to 8.9 billion tonnes per year, slightly exceeding last year’s level. Demand for coal products continues to grow in developing economies in Asia, primarily in India and Southeast Asian countries, compensating for the reduction in coal use in Europe and North America.
According to the IEA, in the first half of 2025, global demand for coal even slightly decreased due to increased generation from renewables and mild weather; however, a small increase (~1%) is expected by year-end. With current trends, 2025 will mark the third consecutive year with a near-record level of coal consumption. Production is also increasing – especially in China and India, which are boosting domestic production to reduce import dependence.
Prices for thermal coal remain relatively stable, as high Asian demand supports market balance. However, analysts believe that global demand for coal has reached a plateau and will gradually decline in the coming years as the development of renewable energy accelerates and climate policies tighten.
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