Oil and Gas News and Energy, Wednesday, 3rd December 2025 - OPEC+ Implements Capacity Audit, Oil Prices Decline

Current News in the Oil and Gas Sector and Energy for Wednesday, 3 December 2025: OPEC+ Decisions, Oil Price Dynamics, Gas Market Situation, Power Generation, Renewable Energy, Coal, Refineries, and Oil Products. Analysis for Investors and Energy Market Participants.

Oil Market

• Global Oil Market: An oversupply and active growth in production are weighing on prices. Brent crude is trading around $63 per barrel, close to its lowest levels in two years.
• OPEC+: At its latest meeting, OPEC+ agreed to a moderate increase in oil production for December (+137,000 barrels/day from the November level) while maintaining a pause on further increases at the beginning of 2026.
• USA: Oil production in the United States continues to rise, with output in the Lower 48 states reaching a record 11.4 million barrels/day in July 2025. Drilling efficiency is improving, despite a decline in active rigs.
• Transportation: Last week, Ukrainian drones damaged a terminal at the Caspian Pipeline Consortium (CPC) in the Black Sea, but oil pumping has already resumed through an alternative location.

Gas Market

• European Storage: Gas storage in Europe is approximately 75–80% full, contributing to a calm atmosphere in the market. January TTF futures have dropped to historic lows of around €28/MWh ($335/1,000 m³), aided by warm weather and excess fuel supply.
• LNG Supplies: Liquefied gas exports from the US and Australia are being ramped up significantly. A record number of gas carriers are observed on their way globally. Meanwhile, demand in Asia is slowing; China is reducing its own LNG purchases and even reselling excess supplies, further stabilising the European market.
• Russia - China: Gazprom is breaking records for gas supplies to China: on 1 December, the Power of Siberia pipeline surpassed 100 million m³ per day for the first time, with annual volumes planned to increase to 44 billion m³. The growth of supplies through Power of Siberia is reducing China's dependence on LNG and affecting the global gas balance.
• Transit and Negotiations: Consultations are ongoing regarding the extension of gas transit through Ukraine after 2024, and discussions concerning Russia's energy relations with the European Union. Market participants expect that the final agreements on gas could impact the structure of supplies to Europe in 2026.

Power Generation and Renewable Energy

• Infrastructure Investments: At the COP30 climate conference, major global utilities announced plans to increase spending on energy transition to a record ~$148 billion per year. Of this, approximately $66 billion annually will go towards new renewable energy sources, while around $82 billion will be allocated for building networks and energy storage.
• Renewable Energy Growth: Installed capacity for green generation is growing rapidly. Many countries broke annual records for solar and wind power installations in 2025 (for instance, India added over 25 GW of new capacity within the first seven months). The accelerated growth of renewable energy keeps CO₂ emissions levels stable.
• Decarbonisation: The final document from COP30 reaffirmed commitments under the Paris Agreement but did not introduce an outright abandonment of oil and coal. Nevertheless, some countries are tightening environmental policies: South Korea has announced its entry into the Powering Past Coal alliance and pledged not to build new coal-fired power plants, planning to retire 40 of its 61 operating power stations by 2040.
• European Strategy: The European Union remains committed to energy independence. Ambassadors have agreed on a plan to completely cease imports of Russian oil and gas by 2028, as well as implement an embargo on Russian LNG starting from 2027. Additionally, member states are required to ensure gas storage levels reach a minimum of 90% by November 2027.

Coal Sector

• Asian Demand: In Southeast and South Asia, coal remains the primary source of electricity generation. Long-term contracts and a rapidly growing industry support high coal consumption volumes, although the share of renewable sources is gradually increasing.
• China: The world's largest coal consumer is showing signs of stabilising demand. Plans are in place to contain the growth of coal generation – new power plants are being constructed at a slower pace, and several provinces are imposing restrictions on coal projects. This has already been reflected in the slowdown of CO₂ emissions growth.
• Carbon Transition: Some countries are officially announcing their departure from coal. For example, South Korea has joined the Powering Past Coal alliance, rejected the construction of new coal-fired power plants, and has committed to closing the majority of its operating coal power stations by 2040.

Oil Products and Refineries

• Fuel Demand: Global consumption of diesel and jet fuel continues to grow, stimulating distillate fractions, while demand for gasoline remains relatively weak due to increased energy efficiency in transport and slowing economic growth.
• Refinery Operations: Many large refineries in Asia and the Middle East are operating at near-full capacity to meet domestic demand and fuel exports. European refineries are working at capacity using alternative oil sources (e.g., Azerbaijani or Kazakh), compensating for restrictions on Russian oil.
• Margins and Projects: Refining margins remain uneven: low oil prices are limiting profitability amid an oversupply of crude, but diesel shortages are supporting the profitability of distillate refineries. New expansion projects are underway in Asia and the Middle East, while investment in refiners in several developed countries is constrained due to the transition to renewable sources and stringent environmental regulations.

Companies and Investments

• Russian Emissions: Gazprom Neft is preparing to place ruble bonds worth up to 20 billion rubles with a floating coupon tied to the key rate. The Russian Ministry of Energy has approved RusHydro's investment programme for 2026, maintaining the overall funding level as previously planned.
• Market Deals: International companies are increasing diversification efforts. ExxonMobil is in talks with the Iraqi government to acquire Lukoil’s stake in the large West Qurna-2 field, as Lukoil plans to sell off foreign assets under sanctions. Meanwhile, traders and oil companies (Gunvor, Vitol, Citadel, etc.) are ramping up investments in oil and gas production, particularly in US shale gas projects, attempting to build integrated supply chains.
• Major Investment Programmes: In addition to private deals, energy companies and investors plan significant capital inflows into the sector. The global association of energy holdings UNEZA anticipates over $1 trillion in investments by 2030 (including support for tens of thousands of kilometres of new lines and battery capacity), while increasing production and infrastructure remains a priority in the oil and gas sector.

Geopolitics and Regulation

• Ukraine: Negotiations for conflict resolution remain a vital factor for the markets. Concurrently, practical actions continue: Russia and Ukraine are mutually striking at infrastructure (oil and gas facilities and tankers). In this context, the risk premium on energy commodities has increased, although hopes for the resolution of military actions are exerting downward pressure.
• Sanctions: Western restrictions on Russian energy resources continue to impact the market. US sanctions against Rosneft and Lukoil have already reduced oil and gas revenues for the Russian budget; for January to November 2025, the price for tax purposes fell to nearly $57 per barrel, while the rouble strengthened. The EU is gradually implementing a full ban on Russian oil and gas: ambassadors have approved a bill to eliminate Russian fuel by 2028 and are planning an LNG embargo starting in 2027.
• Middle East and Asia: Instability in the region continues to impact oil and gas markets. Iranian oil reserves and the potential resumption of its exports remain on OPEC's agenda, while a potential normalisation of relations between the US and Venezuela could alter supply structures. At the same time, Asian countries are strengthening energy security through bilateral agreements and the development of local resources.

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