Current News from the Oil, Gas, and Energy Sector for Thursday, 18 December 2025: Oil, Gas, Electricity, Renewables, Coal, Refineries, and Key Events in the Global Energy Market.
Oil and Oil Products
The global oil market remains under pressure: the price of Brent crude is stabilizing around $60 per barrel, and WTI is trading near $55 per barrel — the lowest levels seen in recent years. The main factors contributing to the decline in oil prices include:
- Expected surplus supply: A projected oversupply is expected in 2026, as non-OPEC countries have ramped up production to record levels.
- Hopes for peace in Ukraine: Progress in negotiations between Russia and Ukraine has raised expectations for an easing of sanctions and a return of some Russian oil exports to the market.
- OPEC+ Policy: The OPEC+ alliance, after months of gradually increasing production, has decided to pause in Q1 2026, indicating caution amid the risk of oversupply.
As a result of these factors, oil prices have significantly decreased compared to the beginning of the year. Brent and WTI may close 2025 at levels not seen since 2020. The fall in crude prices has already impacted petroleum product markets: gasoline and diesel have also decreased in price. In the United States, retail gasoline prices have fallen in most states ahead of the holiday season, reducing consumer expenditure. European refiners, having switched to alternative crude instead of Russian oil, are operating with a stable supply of feedstock. Global refineries are generally maintaining high levels of processing, benefiting from lower oil prices, although fuel demand is increasing at a moderate pace. Refining margins remain stable, and there are no observed shortages of gasoline or diesel on the global market.
Gas Market and LNG
A paradoxical situation is developing in the gas market: despite an early and cold winter, natural gas prices in Europe continue to decline. Dutch TTF hub prices have dropped below €30 per megawatt-hour, the lowest level since spring 2024. This is nearly 90% below the peak levels observed during the 2022 crisis and 45% lower than prices at the beginning of 2025. The primary reason is the avalanche of liquefied natural gas imports, especially from the United States, which have compensated for reduced pipeline supplies from Russia. Gas storage facilities in the European Union are approximately 75% full, which, although below long-term averages, combined with record LNG imports, provides sufficient resources for stable pricing.
- Europe: High volumes of LNG have been driving down gas prices, even with reduced storage levels. The US accounted for over half of European LNG imports in 2025, redirecting supplies from Asian markets. This has led to a sharp reduction in the price spread between European prices and cheaper American gas.
- USA: Conversely, in North America, gas futures have risen amidst forecasts of unusual cold weather. Henry Hub prices jumped above $5 per MMBtu due to the threat of polar vortex conditions and increased heating demand. However, overall domestic production in the US remains high, curbing price growth as the weather normalises.
- Asia: The Asian gas market is relatively balanced at the end of the year. Demand in key countries (China, South Korea, Japan) has been moderate, allowing additional LNG shipments to be redirected to Europe. Prices at Asian hubs (e.g., JKM) remained stable without experiencing sharp fluctuations, as competition for cargoes between Europe and Asia has weakened compared to 2022.
Thus, the global natural gas market enters winter much more confidently than a year ago: there is enough supply and imports to meet needs even during cold periods. The flexibility of the LNG market plays a crucial role, with tankers quickly changing course in favour of Europe, smoothing regional imbalances. If average temperatures remain consistent, the pricing situation for gas consumers looks promising.
Coal Sector
The traditional coal segment reached a historical peak in consumption in 2025, but prospects indicate a forthcoming slowdown. According to the International Energy Agency (IEA), global coal consumption is estimated to have increased by approximately 0.5% in 2025, reaching a record 8.85 billion tonnes. Coal remains the largest source of electricity generation globally; however, its share is set to decrease: the IEA forecasts that coal demand will plateau and gradually decline by 2030 due to the growth of renewable energy and nuclear generation. Regional trends are showing divergence:
- India: Coal consumption has decreased (the third drop in the last 50 years) due to an unusually strong monsoon season. Heavy rainfall has boosted hydroelectric generation and cooled demand for electricity from coal-fired power plants.
- USA: Conversely, coal use has risen. This has been spurred by higher natural gas prices in the first half of the year and political support for the sector. The new administration in Washington has halted the decommissioning of certain coal-fired power stations, temporarily increasing domestic coal demand for electricity.
- China: The world's largest coal consumer has maintained consumption levels from last year. China burns 30% more coal than the rest of the world combined; however, a gradual decline is expected by the end of the decade as large capacities of wind, solar, and nuclear energy come online.
Thus, 2025 is likely to be a peak year for coal. Increasing competition from natural gas (where feasible) and particularly from renewable sources of energy will displace coal from the energy balance of many countries. Nevertheless, in the short term, coal remains in demand in developing Asian economies, where growth in energy consumption continues to outpace the development of new clean capacities.
Electricity and Renewables
The electricity sector continues to transform under the influence of climate agendas and fuel price fluctuations. In 2025, the share of renewable energy sources (RES) in global electricity production reached new heights: many countries have introduced record capacities of solar and wind power plants. For instance, China is rapidly expanding solar generation, while Europe and the US are deploying new offshore wind farms and photovoltaic projects, spurred by government support and private investment. By the end of the year, global investments in green energy remain high, drawing close to investments in fossil fuels.
However, the rapid development of RES poses challenges for ensuring the stability of energy systems. This winter in Europe has highlighted the impact of variable weather: periods of low wind and short daylight hours have increased the burden on traditional generation. At the beginning of winter, EU countries were forced to ramp up gas and coal generation due to low output from wind farms amid an anticyclone. This temporarily increased electricity prices in certain regions. Nevertheless, thanks to the growth of RES capacities, combined with a high share of gas in the energy mix, significant energy supply issues have not arisen. Governments and energy companies are also investing in energy storage systems and network modernisation to smooth peaks and integrate renewable energy.
Climate commitments continue to dictate the trend: at the recent World Climate Summit (COP30) in Brazil, calls were made to accelerate the energy transition. Several countries agreed on measures to triple the implementation of RES by 2030 and enhance energy efficiency. There is also a revival of interest in nuclear energy: new nuclear power plants are being constructed in various regions, and the lifespan of existing ones is being extended to provide baseload generation with zero emissions. Overall, the electricity sector is moving towards a cleaner and more sustainable future, although the transition period requires balancing reliability of supply with environmental goals.
Geopolitics and Sanctions
Geopolitical factors continue to exert a strong influence on energy markets. The focus remains on the conflict in Eastern Europe and associated sanctions:
- Peace negotiations: December has seen significant progress in dialogue aimed at resolving the situation in Ukraine since the conflict began. The US has expressed willingness to provide Ukraine with security guarantees akin to NATO, while European diplomats have reported constructive negotiations. Expectations for a potential ceasefire have increased, although Russia states that it will not concede any territorial claims. Growing optimism regarding the cessation of hostilities has sparked discussions about the possibility of lifting or easing oil and gas sanctions against Russia in the future.
- Pressure through sanctions: Simultaneously, Western countries have indicated their readiness to intensify pressure if the peace dialogue stalls. Washington, in particular, has prepared another package of sanctions against the Russian energy sector, which could come into effect if Moscow rejects the proposed terms of a peace agreement. Earlier in the autumn, the US and UK had already imposed additional restrictions on Russian oil giants "Rosneft" and "Lukoil," complicating their ability to attract investment and technology.
- Infrastructure risks: Ongoing combat and sabotage continue to pose threats to energy supplies. Over the past week, Ukrainian forces have intensified drone strikes on oil infrastructure targets deep within Russia. Specifically, there have been fires at refineries in Krasnodar Krai and on the Volga due to drone attacks. While these incidents do not significantly affect the overall fuel supply, they underscore the persistent military risks facing the industry until a durable peace is established.
- Venezuela: In Latin America, geopolitics also influences the oil markets. Following a partial easing of sanctions against Venezuela in the autumn, the United States has tightened control over compliance with transaction conditions. In December, an incident occurred involving the detention of a tanker carrying Venezuelan oil over suspected licence violations. The state-owned company PDVSA has faced demands from clients to increase discounts and alter supply terms. This has complicated Venezuela's export growth, despite the recent US allowance for temporary production increases in exchange for political concessions from Caracas.
Overall, the sanctions standoff between Russia and the West, alongside other international disputes, continues to inject uncertainty into the global energy sector. Investors are closely monitoring political developments, as any changes — from breakthroughs in peace negotiations to the introduction of new restrictions — can significantly impact oil, gas, and other commodity prices.
Corporate News and Projects
Major oil, gas, and energy companies worldwide are closing out the year with several important events and decisions:
- Shell exits German refinery: British-Dutch Shell has resumed its efforts to sell its 37.5% stake in the Schwedt refinery in Germany. This facility was previously controlled by "Rosneft" and came under the management of the German government following events in 2022. Shell is seeking a buyer by the end of January, aiming to completely distance itself from an asset that carries sanction risks.
- Middle Eastern expansion: In Kuwait, the oilfield services company Action Energy (AEC) has successfully conducted an initial public offering on the local stock exchange and announced plans for regional expansion. The funds raised will be directed towards expanding drilling and well servicing operations in Kuwait and surrounding countries, where oil and gas production is increasing. This move reflects the strengthening of positions in the Middle Eastern business amid rising oil output in the region.
- New gas deals in Europe: European buyers continue to diversify their gas supplies. The Hungarian state-owned company MVM has signed a five-year contract with American Chevron for the supply of liquefied gas amounting to approximately 2 billion cubic meters per year. This LNG will be delivered through European terminals, reducing Hungary's dependence on pipeline gas and enhancing the country’s energy security. The deal demonstrates deepening cooperation between the US and Eastern Europe in the gas market.
Overall, oil and gas companies are adapting to the new market reality: some are reassessing assets and portfolios considering geopolitical risks (as Shell is doing in Europe), while others are capitalising on favourable market conditions for growth (as Middle Eastern players are). At the same time, investments continue in both traditional oil and gas projects and energy transition initiatives. Industry giants are required to balance short-term profitability with long-term decarbonisation trends, which defines key strategic decisions in the energy sector as we approach 2026.
