Energy & Transport Market Wrap December 2025
Supply shocks, geopolitics and NOC moves rerouted cargos and hit oil; China EV surge tightened freight/storage premia, volatility into '26.
Key Trends
December closed with supply disruptions and geopolitics as the dominant drivers across Energy & Transport. National oil company (NOC) flow decisions and Russia–Ukraine strikes repeatedly re‑priced oil and distillates, while LNG and LPG cargo rerouting exposed transport chokepoints and lifted freight and storage premia. Simultaneously, China’s surge in EV exports and a notable battery-asset sale reshaped vehicle and shipping supply chains, and renewed interest in nuclear (SMRs plus AI‑linked fuel‑cycle demand) signalled a growing investment leg to the transition.
Notable Events
- End‑month supply interruptions that amplified copper and energy volatility and stressed key transport routes. - Russia–Ukraine strikes that pushed short‑term oil and diesel tightness. - NOC actions (including CNOOC-related shifts and Turkey supply adjustments) that reallocated crude flows. - China’s EV export surge and an EV battery asset transaction that rerouted maritime capacity and battery supply chains. - Permian water‑handling limits constraining some U.S. shale logistics. - New nuclear commitments (SMR momentum) and AI interest altering medium‑term fuel‑cycle dynamics. - New Zealand gas tightness and holiday diesel demand tightening distillate balances.
Performance
Benchmarks experienced elevated volatility: crude saw episodic rallies and reversals on geopolitical and NOC news; copper registered heightened intra‑day swings tied to supply shocks; LNG spot volumes and shipping rates increased as cargos were rerouted. Distillate spreads firmed into the holidays, lifting storage utilization and short‑term premiums; LPG logistics also tightened.
Outlook
Expect continued episodic volatility into early‑2026. Key monitors: NOC production plans and Russia–Ukraine developments, China export policy and EV flows, Permian infrastructure fixes, LNG cargo routing and freight capacity, and SMR project timelines. Near term is supply‑sensitive; medium term points to structural transport and fuel‑cycle reconfiguration as investment flows into nuclear and battery assets.