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

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

The global energy sector enters the winter season with a surplus of resources and significant strategic decisions. The oil market is under pressure due to increased production and high inventories: oil prices have dropped to two-year lows. Gas markets remain calm thanks to full storage facilities and record supplies. Key focus areas include OPEC+ decisions, unprecedented Russian gas deliveries to China, and extensive investment plans in green energy.

Oil Market

Global Oil Market: An oversupply and active production growth are putting pressure on prices. Brent is trading at around $63/barrel, close to two-year minimums.
OPEC+: At the latest OPEC+ meeting, a moderate oil production increase was agreed for December (+137,000 barrels/day from November levels) while maintaining a pause on further increases at the beginning of 2026.
USA: U.S. oil production continues to rise: in July 2025, output in the lower 48 states reached a record 11.4 million barrels/day. Drilling efficiency is increasing even as the number of active rigs declines.
Transportation: Last week, Ukrainian drones damaged one berth at the Caspian Pipeline Consortium (CPC) in the Black Sea, but oil pumping has already resumed through another docking location.

Gas Market

European Stocks: European gas storage facilities are filled to approximately 75–80%, underpinning a calm market atmosphere. January TTF futures have dipped to historically low levels of ~€28/MWh ($335/thousand m³), bolstered by warm weather and excessive fuel supplies.
LNG Supplies: Liquefied gas exports from the USA and Australia are actively increasing. There is a record number of LNG carriers en route globally. Meanwhile, demand in Asia is slowing: China is cutting back on its LNG purchases and even reselling excess supplies, further stabilizing the European market.
Russia – China: Gazprom is breaking records in gas supplies to China: on December 1, "Power of Siberia" first transferred over 100 million m³ per day, with annual volumes planned to increase to 44 billion m³. Increased supplies from "Power of Siberia" reduce China's reliance on LNG and affect the global gas balance.
Transit and Negotiations: Consultations are ongoing regarding the extension of gas transit through Ukraine after 2024 and discussions about Russia's energy relations with the European Union. Market participants expect that final agreements on gas may impact supply structures in Europe in 2026.

Electricity and Renewable Energy

Infrastructure Investments: At the COP30 climate conference, the largest global utilities announced plans to boost expenditures on energy transition to a record ~$148 billion per year. Of this, approximately $66 billion per year will go towards new renewable energy sources, while about $82 billion will be allocated for the construction of networks and energy storage.
Renewable Energy Growth: Installed capacity of green generation is steadily increasing. Many countries broke annual records for the commissioning of solar and wind power plants in 2025 (for example, India added over 25 GW of new capacity in the first seven months). The accelerated growth of renewable energy keeps CO₂ emissions in check.
Decarbonization: The final document from COP30 reaffirmed commitments under the Paris Agreement but did not introduce a direct phase-out of oil and coal. However, 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 out of 61 existing ones by 2040.
European Strategy: The European Union maintains its focus on energy independence. Ambassadors agreed on a plan to completely halt the import of Russian oil and gas by 2028, along with an embargo on purchases of Russian LNG starting in 2027. Meanwhile, member states are required to fill gas storage to a minimum of 90% by November 2027.

Coal Sector

Asian Demand: In Southeast and South Asia, coal remains the primary source of electricity. Long-term contracts and a rapidly growing industry support high coal consumption, although the share of renewable sources is gradually increasing.
China: The world's largest coal consumer shows signs of demand stabilization. Plans are in place to restrain the growth of coal generation – new power plants are being built more slowly, and several provinces are imposing restrictions on coal projects. This has already reflected in the slowing growth of CO₂ emissions.
Carbon Transition: Some countries are officially declaring their phase-out of coal. For instance, South Korea has joined the Powering Past Coal alliance, stopped the construction of new coal-fired power plants, and promised to close most of its existing coal power stations by 2040.

Oil Products and Refineries

Fuel Demand: Global consumption of diesel and jet fuel continues to rise (stimulating distillate fractions), while gasoline demand remains relatively weak due to increased transport energy efficiency and slowing economic growth.
Refinery Operations: Many major refineries in Asia and the Middle East are operating at nearly full capacity to meet domestic demand and fuel exports. European refineries are overloaded, utilizing alternative oil sources (such as Azerbaijani or Kazakhstani), compensating for restrictions on Russian oil.
Margins and Projects: Refining margins remain uneven: low oil prices constrain profitability amid oversupply, while diesel shortages support the profitability of distillate refineries. New capacity expansion projects are underway in Asia and the Middle East, whereas investments in refineries in developed countries are constrained due to the transition to renewable sources and strict environmental regulations.

Companies and Investments

Russian Issuances: Gazprom Neft is preparing to issue ruble bonds totaling up to 20 billion rubles with a floating coupon linked to the key rate. The Russian Ministry of Energy has approved RusHydro's investment program for 2026, with overall financing to remain at previously planned levels.
Market Deals: International companies are ramping up diversification. ExxonMobil is negotiating with the Iraqi government to acquire Lukoil's stake in the West Qurna-2 oil field, as Lukoil, under sanctions, plans to divest from foreign assets. Concurrently, traders and oil companies (Gunvor, Vitol, Citadel, etc.) are increasing investments in oil and gas production, particularly in U.S. shale gas projects, attempting to build integrated supply chains.
Major Investment Programs: Besides private deals, energy companies and investors are planning 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 kilometers of new lines and battery capacities), with increased production and infrastructure remaining a priority in the oil and gas sector.

Geopolitics and Regulation

Ukraine: Negotiations to end the conflict remain a crucial factor for markets. At the same time, practical actions continue: Russia and Ukraine are reciprocally striking at infrastructure (oil and gas facilities and tankers). Against this background, the risk premium on energy carriers has increased, although hopes for the resolution of military actions have led to downward pressure.
Sanctions: Western restrictions on Russian energy resources continue to impact the market. U.S. sanctions against Rosneft and Lukoil have already reduced oil and gas revenues to the Russian budget, with prices for tax purposes falling to nearly $57/barrel from January to November 2025, while the ruble has strengthened. The EU is gradually implementing a full ban on Russian oil and gas: ambassadors have approved a bill to phase out Russian fuels by 2028 and plan for an LNG embargo starting in 2027.
Middle East and Asia: Instability in the region continues to influence oil and gas markets. Iranian oil reserves and the potential resumption of its exports remain on OPEC's agenda, while a potential normalization of relations between the U.S. and Venezuela could change supply structures. Meanwhile, Asian states are strengthening energy security through bilateral agreements and developing local resources.

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