Current News in the Oil, Gas, and Energy Sector as of 1 December 2025: Oil Market Trends, Europe's Gas Balance, Renewable Energy Development, Coal Sector Dynamics, and Refineries' Outlook. Analysis for Investors and Energy Companies.
Current events in the global energy market are unfolding under pressure from oversupply and geopolitical uncertainty. Oil prices remain close to two-year lows amid weak demand, while European gas stocks are nearing record levels, providing reassurance for the heating season. Against this backdrop, global investors are actively pouring funds into green energy and network modernisation, taking into account the long-term trends towards a shift to clean energy. Below is an overview of key news in the oil, gas, and energy sectors as of 1 December 2025.
Oil Market: Supply and Demand Balance
- OPEC+ Production Increase: OPEC+ members agreed to a slight increase in quotas in December (approximately +137,000 barrels per day), while maintaining the suspension of further increases in Q1 2026 due to fears of market oversaturation. This supports a supply surplus and restrains significant price growth.
- Demand Slowdown: The International Energy Agency reports weak dynamics in global oil consumption. Demand is growing much slower than last year, which, combined with inventory build-up (particularly in the USA), exerts downward pressure on prices.
- US Oil Stocks: U.S. commercial oil inventories continue to rise (the Energy Department reports an increase last week), while the number of active drilling rigs remains close to historical lows. At the same time, U.S. production (13.8 million barrels per day in September) is reaching record highs, intensifying concerns over market oversupply.
- Geopolitical Context: Negotiations among the USA, Russia, and Ukraine regarding conflict resolution remain a focal point for investors. Statements regarding readiness for peace have temporarily lowered oil prices (in anticipation of sanction relief), but the absence of guarantees maintains uncertainty. Even in the event of a peace agreement, any easing of restrictions on Russian oil exports will likely be gradual, making its impact on global prices unlikely to be immediate.
Gas Market: Stocks and Regional Trends
- European Stocks: As of early December, European underground storage facilities are filled to approximately 75-80% of total capacity, which notably exceeds the average levels of previous years and provides resilience during the cold season. This situation eliminates panic buying and sharp price spikes for gas.
- Prices and LNG: European gas prices (TTF) are holding below €30/MWh — the lowest since the onset of the energy crisis. The USA and other suppliers are actively increasing liquefied natural gas (LNG) exports (in 2025, LNG import in the EU has doubled compared to the same period last year). Meanwhile, Russia continues to redirect gas eastward: supplies to China are increasing via the 'Power of Siberia', and Gazprom is raising supplies to Turkey, compensating for a complete halt in transit through Ukraine.
- Changing Routes: Europe continues to diversify its supply sources, with additional LNG terminals and interregional gas pipelines being constructed (through North Africa, Azerbaijan, etc.). Russia is exploring new routes and sales mechanisms: land routes to China are under consideration, and the expansion of LNG flows from 'Yamal LNG' and 'Arctic LNG' is accelerating, while discussions regarding new pipelines for southern routes are underway.
Electricity and Renewable Energy: Investments and Innovations
- Record Growth in Green Generation: Many countries have set historical records in electricity production from wind and solar sources. In Europe, the USA, and China, major wind and solar projects have been completed. Investors are pouring record sums into expanding 'clean' energy and developing energy storage systems (lithium-ion and alternative batteries) to enhance network flexibility amid a high share of renewable sources.
- Climate Agenda: At the COP30 climate summit in Brazil, world leaders agreed on annual investments of around $148 billion in modernising electricity networks and energy storage systems, as well as launching a global carbon trading system. However, the final declaration did not include direct calls for abandoning hydrocarbons, reflecting an attempt to balance the interests of fuel exporters with those advocating for a 'green' transition.
- Nuclear Energy: Russia has announced a large-scale nuclear power plant development programme—by 2042, 38 new energy units (around 30 GW) are planned to be commissioned, which will increase the share of nuclear generation to a quarter of the energy balance. Simultaneously, China, the USA, and several European countries are investing in new small modular reactors and exploring innovative nuclear technologies, supporting the role of nuclear energy in ensuring network stability.
Coal Sector: Demand and Prices
- Growth in Asia: China entered the 2025/2026 heating season with record coal production—electricity generation from coal-fired plants in October-November exceeded last year's figures by 7-8%. However, production restrictions in China (as per "anti-inflation" measures) are leading to resource shortages and rising domestic prices: at port terminals, coal prices have risen nearly 40% from this year's lows.
- Europe and the World: In contrast to Asia, Europe and the USA continue to reduce coal consumption (in favour of gas and renewables). Some countries are systematically closing coal-fired power plants, leading to decreased demand. According to the World Bank, global coal demand fell by about 1% year-on-year in the first half of 2025 due to the rapid growth of 'green' generation, although a revival in industrial growth may alter this dynamic.
- Prices and Trade: Limited production from major exporters (Indonesia, Australia) and rising demand in Asia are supporting global coal prices. European traders are reducing purchases, but volatile funds remain in the market: major players are already signing long-term contracts for coal supplies in 2026, anticipating continued price increases.
Oil Products and Refineries: Domestic Market and Exports
- Tax Incentives Abroad: In late November 2025, Russia passed a law allowing oil companies to reclaim excise duties paid for oil processing at foreign refineries operated under tolling agreements. This damping mechanism covers gasoline and diesel produced from Russian oil at foreign refineries (including Belarusian), stimulating processing abroad and increasing the export of oil products to Asian and European countries.
- Domestic Market Stabilisation: After an autumn fuel shortage, the government has imposed export restrictions on gasoline and diesel and expanded damping tools. By the end of November, domestic wholesale prices for automotive fuel began to decline, allowing for the elimination of shortages at gas stations. This stabilises retail prices and reduces inflationary pressure on the economy.
Russian Oil and Gas Sector: Finances and Infrastructure
- Financial Results: The combined net profit of the largest Russian oil and gas companies fell nearly by half (to about 2 trillion rubles) in the first nine months of 2025, while the number of loss-making enterprises sharply increased. This is linked to the decline in the average export price of Urals (to ~$65-70 from $75-80 a year earlier), the strengthening of the rouble, and increased costs (insurance, logistics) amid sanctions.
- Gas Segment: Gazprom remains profitable thanks to high contract prices and market diversification. Despite the complete cessation of transit through Ukraine, the company has increased supplies via the 'Power of Siberia' and 'Turkish Stream'. The government supports the sector through programmes aimed at modernising gas transport infrastructure and constructing new underground gas storage facilities.
- Oil Segment: Oil production in Russia is close to its maximum, but revenue is declining due to sanctions and market oversaturation. The launch of new projects is hampered by restrictions (sanctions have been imposed against Rosneft and Lukoil), therefore Gazprom Neft and Rosneft are reallocating capacities in favour of petrochemicals and exports to eastern markets, while domestic refineries are operating at reduced capacity.
Geopolitics and Sanctions: Impact on the Energy Market
- Diplomatic Negotiations: The energy market is acutely responsive to reports regarding the progress of negotiations concerning Ukraine. While there are no real shifts towards peace, local price reactions are limited to expectations of future changes. Investors understand that any agreement will lead only to a gradual easing of export restrictions, hence the primary influence on quotations remains with fundamental supply and demand factors.
- International Diversification: Western countries continue to systematically reduce dependency on Russian energy resources. Europe is increasing purchases from the USA, the Middle East, and other regions, while also expanding green energy initiatives. The USA and its allies are ramping up domestic oil and gas production to bolster energy security, while simultaneously maintaining sanctions against Russian oil and gas projects.
