Current Oil and Gas Sector News for Friday, 26 December 2025: Global Oil and Gas Markets, OPEC+ Decisions, Renewable Energy, Coal, Refineries, Electricity, and Key Energy Trends for Investors and Market Participants.
The latest developments in the global fuel and energy complex on 26 December 2025 capture the attention of investors and market participants with mixed signals. Diplomatic negotiations continue regarding the resolution of the protracted conflict in Eastern Europe; however, concrete results remain elusive. The United States and European partners have offered unprecedented security guarantees to Kyiv in exchange for a ceasefire, instilling cautious optimism for a potential peace agreement. Nevertheless, no formal agreements have been reached, and the stringent sanctions regime against the Russian energy sector remains intact.
The global oil market is under pressure from an oversupply and weakened demand. Benchmark Brent crude prices are hovering around $62 per barrel – close to the lowest level since 2021, indicating a build-up of crude oil surplus. The European gas market is displaying resilience: even during peak winter demand, underground gas storage in the EU is approximately two-thirds full, effectively mitigating the risk of shortages. Stable supplies of liquefied natural gas (LNG) and alternative pipeline fuels have kept wholesale prices at moderate levels, significantly below the peaks seen in 2022, alleviating the burden on consumers.
Meanwhile, the global energy transition is accelerating. Numerous countries are setting new records for electricity generation from renewable sources; however, traditional coal and gas power plants remain crucial for energy system reliability. Concurrently, interest in nuclear energy is reviving in several regions as a stable low-carbon source. Global coal consumption is estimated to have reached a historical peak in 2025 and is on the verge of decline. Below is a detailed overview of the key news and trends in the oil, gas, electricity, and raw material sectors as of this date.
OPEC+ Maintains Production Levels to Stabilise the Market
- At the December meeting, OPEC+ participants decided to maintain current oil production quotas for the first quarter of 2026 to prevent a potential oversupply in the market.
- Member countries have already returned around 2.9 million barrels per day to the market from previously reduced volumes, yet the overall production cut of approximately 3.2 million b/d still applies and has been extended until the end of 2026.
- The meeting took place amid a renewed attempt by the U.S. to reach a peace agreement between Russia and Ukraine. OPEC+ considers that a successful negotiation and potential easing of sanctions could bring additional oil volumes to the market, whereas failure would intensify sanctions pressure and limit exports from Russia.
Stable Oil Prices
Global oil prices are closing the year without sharp fluctuations, stabilising within an average range. Brent remains around $62–63 per barrel, while WTI hovers around $58–59, reflecting a balance between steady demand and sufficient supply in the oil market.
- Earlier this week, oil prices increased by approximately 2% due to strong macroeconomic data from the U.S.: GDP growth in the third quarter exceeded expectations, heightening demand forecasts for energy resources.
- As the festive season approaches, trading activity on exchanges has decreased, further limiting volatility and contributing to relative price stability as the year concludes.
Natural Gas: Comfortable Stocks and Moderate Prices
The natural gas market entered winter relatively calmly. In Europe, even the cold December weather has not sparked panic: EU gas storage facilities remain over 65% full, significantly above historical averages for this time of year. Such a stock level practically guarantees the absence of gas shortages this winter.
- Wholesale gas prices are being maintained at moderate levels. Futures for natural gas at the TTF hub are trading around €27 per MWh (approximately $320 per thousand cubic meters) – a low not seen in nearly 18 months, notably below the price peaks of 2022.
- Active LNG imports continue to replenish European storage: by the end of 2025, total LNG imports into Europe will approach record levels. High supply volumes are preventing price increases even with rising demand during the colder period.
- Looking ahead, potential risks for prices could arise from competition for LNG from Asia if economic growth in Asia-Pacific countries accelerates, leading to increased Asian demand. However, at present, the balance in the gas market remains favourable for consumers.
Geopolitics and Sanctions: Impact on Energy Supply
Political conflicts and sanctions continue to significantly affect global energy markets, presenting both threats of disruption and hopes for improvement. In recent weeks, market attention has been focused on diplomatic efforts to resolve the crisis: negotiations involving the U.S., EU, Ukraine, and Russia (including meetings in Berlin and Anchorage) have demonstrated a willingness among parties to find a compromise.
As of now, there has been no breakthrough; therefore, strict sanctions on Russian oil and gas exports remain in place. Moreover, Washington has previously signalled its readiness to tighten measures in the absence of progress: a potential 100% tariff on all Chinese exports to the U.S. was discussed if Beijing did not reduce its purchases of Russian oil. However, the continuation of dialogue has allowed for the postponement of the most severe measures, and in the coming weeks, markets hope for positive shifts. Any rapprochement of positions could enhance investor sentiment and soften the sanctions rhetoric, while a failure in negotiations risks a new escalation of trade restrictions. Thus, the political factor remains a key uncertain driver for oil and gas supply in 2026.
Renewable Energy: Wind Records and Investments
The renewable energy sector continues to experience rapid growth worldwide, setting new capacity records and attracting substantial investments, even amidst ongoing geopolitical instability. The year 2025 has become significant for green energy, showcasing its resilience and appeal for capital investments.
- The United Kingdom reached a historic peak in wind power generation on 5 December, generating 23,825 MW, which accounted for over half of the country's instantaneous power consumption at that time. This record was facilitated by strong winter winds and the expansion of offshore wind farms.
- According to BloombergNEF, global investments in new renewable energy projects in the first half of 2025 reached a record $386 billion. The majority of funding is directed towards the development of solar and wind generation, as well as energy storage systems necessary for integrating renewables into the energy system.
- In the U.S., a federal court lifted the ban on constructing new wind energy projects on federal lands and offshore, which had been imposed earlier this year. The court's decision paves the way for the implementation of large offshore wind farms and supports state plans to increase the share of clean energy.
- China maintains its global leadership in renewables: the total installed capacity of renewable sources in the country has exceeded 1.88 TW (around 56% of the total capacity of the electricity sector). The massive deployment of solar and wind stations, as well as storage systems, has allowed China to keep CO2 emissions stable despite economic growth.
Nuclear Energy: The Return of Large Capacity
After a prolonged decline in the global nuclear sector, a revival is underway. Various countries are reassessing the role of nuclear generation as a stable low-carbon energy source, aiming to reduce dependence on fossil fuels and ensure the reliability of energy systems.
- Japan is preparing for the partial restart of the largest nuclear power plant, Kashiwazaki-Kariwa. TEPCO has received approval from the Niigata prefectural authorities and is set to launch Unit 6, with a capacity of 1,360 MW, on 20 January 2026 – this will be the first reactor commissioned by the company since the 2011 disaster. The complete restoration of the 8.2-gigawatt plant is planned to occur in phases over several years.
- The Japanese government has announced measures to support the nuclear sector with the aim of at least doubling the share of nuclear generation in the country's energy balance by 2030. A system of government loans and guarantees for reactor upgrades is being introduced; currently, 14 out of 33 reactors remaining after the Fukushima disaster have resumed operation.
- A return to nuclear energy is evident in other regions as well. In Europe, the Finnish reactor Olkiluoto-3 became operational at full capacity in 2025, while France and the UK are investing in new nuclear plants. In the U.S., the extension of the operating life of existing units and funding for small modular reactor projects are being considered.
Coal Sector: Peak Consumption and Gradual Decline
The global coal market reached a historic peak in 2025, after which a trend reversal is anticipated. According to the International Energy Agency, global coal consumption grew by approximately 0.5%, reaching around 8.85 billion tonnes this year. However, substantial further growth is not expected; on the contrary, slow declines in coal demand are forecasted by the end of the decade, as renewables, nuclear, and natural gas gradually displace coal from power generation.
- In the U.S., coal consumption for electricity generation increased in 2025. This was aided by last year's spike in gas prices and a temporary directive from the administration to extend the operation of certain coal-fired power plants that were previously slated for closure.
- China remains the largest coal consumer, accounting for about 60% of the country’s electricity generation. In 2025, coal demand in China stabilised; a gradual decline is expected by 2030 due to the massive introduction of renewable capacities. Beijing's policy aims to peak emissions by 2030, signifying a reduction in the role of coal in the years to come.
Petroleum Products and Refining: High Margins at Year-End
By the end of 2025, the global petroleum products market shows high profitability for refineries. The drop in oil prices combined with steady demand for gasoline, diesel, and jet fuel has ensured an increase in refining margins across many regions. Refiners benefit from the relative cheapness of the raw material while still maintaining healthy levels of petroleum product consumption.
- Global indicative margins for oil refining have surged to their highest levels in recent years. Notably, growth in profitability is recorded in the diesel segment, where demand remains robust in transport and industry.
- The construction of new refineries in Asia and the Middle East (for example, large complexes in China and Gulf countries) is increasing global refining capacities. However, the simultaneous closure of outdated facilities in Europe and North America maintains a relative balance in the petroleum products market, preventing oversaturation and preserving margins.
- In Russia, authorities extended the ban on exporting gasoline and diesel fuel following a summer crisis to saturate the domestic market and lower prices. These measures have stabilised the situation within Russia but simultaneously reduced diesel fuel supplies on the global market, which has also contributed to maintaining high margins in Europe and Asia.
Corporate News: Transactions and Strategies of Energy Companies
The end of the year is marked by significant corporate moves in the energy sector, reflecting companies' aspirations to optimise asset portfolios and adapt to new market conditions. Oil and energy corporations are reassessing strategies, focusing on enhancing efficiency in traditional business while investing in the transition to clean energy.
- BP announced the sale of 65% of its subsidiary Castrol (a lubricants producer) to the American investment fund Stonepeak for $6 billion. The deal values the entire Castrol business at $10.1 billion; BP will retain a 35% stake in the new joint venture. The proceeds will be directed towards reducing debt and paying dividends, in line with the strategy to improve returns in the traditional oil segment.
- Despite sanctions, foreign partners maintain interest in Russian oil and gas projects. For example, Indian ONGC and Japanese SODECO have retained their shares in the Sakhalin-1 project, while a preliminary agreement between ExxonMobil and Rosneft regarding compensation for losses in previous years signals major players' readiness to resume collaboration once the political situation improves.
- The merging of technology and energy continues: American technology giant Alphabet (the parent company of Google) announced in December that it has acquired Intersect Power, which engages in renewable energy projects and grid infrastructure (including supplying power to data centres), for $4.7 billion. This move will enable Alphabet to accelerate the development of its own generation based on renewable sources and reduce its data centres' dependence on overloaded electricity grids.
