As 2025 drew to a close, a highlight was that the United States had undertaken its largest troop mobilisation in the Caribbean in decades. Its Navy has deployed its most advanced aircraft carrier, along with fighter jets, amphibious vessels, attack submarines and tens of thousands of troops, as it intensifies its pressure on Venezuela in an effort to force President Nicolás Maduro from power.
The Trump administration’s National Security Strategy (NSS), released in early December 2025, identifies Latin America and the Caribbean as a strategic priority.
Reviving the 19th century Monroe Doctrine, the document asserts that the U.S. must deny influence or control by outside powers (read China) in Latin America and ensure that the Western Hemisphere remains under American political, economic and military influence.
The push to reinforce American primacy in Latin America coincides with U.S. President Donald Trump’s waning interest in Europe, another long-standing U.S. sphere of influence. Since the end of the Second World War, the
U.S. has served as Europe’s primary security guarantor. If Washington kept western Europe together through a tightly knit alliance during the Cold War, it expanded this security umbrella to eastern Europe after the disintegration of the Soviet Union, creating a large transatlantic bloc. Under Mr. Trump, however, the U.S. is no longer interested in shouldering the burden of European security — a position explicitly articulated in the NSS. Why is America, at a moment when Russia and China are seeking to overturn the U.S.-built and U.S.-led security and economic order, stepping back from Europe while moving to consolidate its influence in the Western Hemisphere?
It is difficult to discern a cohesive doctrine in Mr. Trump’s foreign policy, marked by the President’s impulses and unpredictability. Yet, even these impulses, this unpredictability and his ideological orientation rooted in Christian nationalism and America’s might cannot ignore the structural shifts reshaping the international order. Mr. Trump is not the ‘President of peace’ that he claims to be
— he has already bombed six countries, even if he has stopped short of a full-scale war.
At the same time, Mr. Trump, despite his rhetoric about American military and economic dominance, recognises that he no longer lives in a unipolar world. His reluctant aggression and strategic recalibration are reflections of the changes now taking shape in the global balance of power.
Three great powers
When the Soviet Union disintegrated in 1991, a new order emerged with the U.S. at its centre. There was no other great power positioned to challenge American primacy.
The unipolar moment, however, has since passed. While future historians may better identify the precise point of rupture, one such moment was Russia’s annexation of Crimea in 2014. The ensuing conflict in eastern Ukraine, the tepid western response, and Russia’s ability to endure despite sanctions reinforced the limits of the ‘rules-based order’.
The end of unipolarity, however, does not mean the end of American dominance. The U.S. remains, and will remain, for the foreseeable future, the world’s pre-eminent military and economic power. What has changed is that Washington is no longer the sole great power shaping geopolitical outcomes. China and Russia now occupy that space as well, deepening what Realist thinkers describe as the inherently anarchic nature of the international system.
During the Cold War, the Soviet Union was America’s
principal rival, and in the 1970s, Washington reached out
to China to exploit fissures within the communist bloc. Today, the U.S. identifies China as its principal and systemic challenger. This, in turn, leaves open the possibility of a reset in ties with Russia — an idea embraced by Mr. Trump’s MAGA (Make America Great Again) ideologues, who frame Russia as part of a shared ‘Christian civilisation’.
The reigning power versus the rising power
The U.S. faces a unique challenge in China. The Soviet economy, in its prime in the early 1970s, reached about 57% of the U.S. GDP, before it began slowing down.
China’s economy, now the world’s second largest, already amounts to about 66% of the U.S. economy. China continues to grow at a faster pace, steadily narrowing the gap.
As China’s economic power expands, it is being converted into military capability (it has already built the world’s largest Navy, by number of ships). Like other great powers, Beijing is seeking to establish regional hegemony and global dominance. So, a prolonged contest between the U.S., the reigning power, and China, the rising power, appears unavoidable. The situation is comparable to 19th century Europe, when a rising imperial Germany threatened to upstage Britain during Pax Britannica, unsettling the ‘Concert of Europe’.
Russia is the weakest link among the three powers. It is a relatively smaller economy with a shrinking sphere of influence. But Russia’s nuclear arsenals, expansive geography, abundant energy and mineral resources and its demonstrated willingness to use force to achieve its strategic objectives keep it in the great power constellation. From Moscow’s perspective, the country drifted into the wilderness in the 1990s before announcing its return in 2008 with the war in Georgia. Since then, it has sought to rewrite the post-Soviet security architecture in Europe. As the West, having expanded the North
Atlantic Treaty Organization into the Russian sphere of influence, responded to Vladimir Putin’s war in Ukraine with sweeping sanctions on Russia and military support for Kyiv, Moscow moved ever closer to China. Russia and China have found common ground in opposing the western ‘rules-based order’ — Russia thinks that the order denies it its rightful place in the world and seeks to revise it accordingly, while China, by contrast, as Rush Doshi argues in The Long Game, wants to replace it with a China-centric order.
Fluid multipolarity
All three great powers today understand that the world is no longer organised around a single centre of authority. In that sense, the world is already multipolar. But unlike the post-Second World War and post-Cold War transitions, the structures of the new order have yet to fully emerge.
During the Cold War, the world was divided into two ideological blocs and two largely separate economic systems. Today, China lacks the kind of satellite state networks that characterised the 20th century superpowers, while the U.S. is reassessing the sustainability of its alliance frameworks, including its commitment to Europe.
Russia, with its own great power ambitions, is wary of being seen as a Chinese ally irrespective of its close strategic partnership with Beijing. This opens a window for a Washington-Moscow reset. But the war in Ukraine remains a stumbling block. Russia may not want to challenge America’s global leadership, but it certainly wants to re-establish its primacy in its sphere of influence.
Thus, there are three great powers with divergent interests that are pulling the global order in different directions, rendering the emerging multipolarity fluid rather than as a structured system akin to the post-Second World War order. This also means that middle powers, including superpower allies such as Japan and Germany, and
autonomous actors such as India and Brazil, would continue to hedge their bets.
Mr. Trump wants Europe to shoulder greater responsibility for its own security, reset relations with Russia and reassert American primacy in its immediate neighbourhood even as Washington prepares for a prolonged great power competition with China. The idea is to return to the classic offshore balancing. Even if Mr.
Trump fails in executing it, future American Presidents may not be able to ignore the shifts that he has initiated. Russia, for its part, seeks to carve out a sphere of influence. China aims to preserve its close strategic partnership with Russia to keep the Eurasian landmass within its orbit, while establishing regional hegemony in East and Southeast Asia — moves that would cement its status as a long-term superpower, much as the U.S. did by asserting its hegemony in the Western Hemisphere in the 19th century, and across the Atlantic in the 20th century. In this fluid landscape, Russia has emerged as the new ‘swing great power’ between the two superpowers, paradoxically lending the emerging multipolar order a distinctly bipolar character.
Written by Stanly Johny
• BRICS Currency Plans – Will They Impact the Dollar and Indian Markets?
BRICS countries are discussing measures to reduce reliance on the US dollar. Proposals range from using national currencies more often to building BRICS Pay, a cross-border payments system, and longer-term talk of a common or basket-based currency. For Indians, these debates matter: they could change trade invoicing, capital flows, and how foreign reserves are held.
The BRICS bloc, originally Brazil, Russia, India, China, and South Africa, expanded in 2025 to include Egypt, Ethiopia, Iran, Saudi Arabia, the UAE, and Indonesia, forming BRICS+. This enlarged grouping now accounts for 49.5% of the global population, 40% of the global GDP (PPP), and 26% of the global trade.
BRICS+ is actively developing cross-border payment frameworks and infrastructure financing mechanisms to reduce dollar dependence and promote trade efficiency. India plays a pivotal role in this transformation, advocating for digital public infrastructure and fintech collaboration. The bloc’s strategic pivot toward multipolarity aims to rebalance global governance and trade flows, especially in energy, technology, and development finance.
India’s trade with BRICS nations surged to $399 billion in 2024, growing at a CAGR of nearly 20% since 2020. However, imports dominated at $304 billion, while exports stood at $95 billion, resulting in a trade deficit of $209 billion. The imbalance is most pronounced with China, Russia, and the UAE, while India maintains a surplus with Brazil and South Africa. India’s export basket includes pharmaceuticals, engineering goods, and textiles, while imports are led by crude oil, electronics, and fertilizers.
BRICS members have not announced a single, immediate replacement for the US dollar. Instead, the grouping’s recent public agenda has three practical strands: encouraging the settlement of trade in local currencies, building alternative payment rails (often called BRICS Pay), and exploring coordinated financial tools such as swap lines or a multilateral currency facility. Here is the possible impact of the currency plan.
As of Q2 2024, the US dollar accounted for 58% of global foreign exchange reserves, down from 71% in 1999 and 85% in the 1970s. This erosion is accelerating due to BRICS-led de-dollarisation. The IMF attributes this to diversification into currencies like the Chinese yuan and Indian rupee. The proposed BRICS currency, backed by gold and commodities, could further reduce dollar holdings among central banks. If BRICS nations shift even 10% of their $1.3 trillion combined reserves away from USD, it could trigger a $130 billion reallocation shock across global markets.
India’s RBI now permits Category-I AD banks to open Special Rupee Vostro Accounts (SRVAs) without any prior approval, streamlining INR- based cross-border settlements. This policy shift enables faster rupee invoicing for BRICS trade, bypassing dollar intermediation. As of August 2025, INR-based trade settlements rose, driven by deals with Russia, the UAE, and South Africa. This reduces India’s forex outflow and enhances monetary autonomy. If sustained, it could save India over $9 billion annually in transaction and hedging costs.
BRICS is exploring a commodity-backed currency, tentatively called the “Unit” anchored in gold, oil, and rare earths. This challenges the dollar’s pricing monopoly in global commodities. For instance, if 30% of BRICS oil trade (approx. $180 billion annually) shifts to the Unit, it could reduce dollar demand in energy markets. This would weaken petrodollar recycling and impact US Treasury demand from oil-exporting nations. India, a major oil importer, could benefit from reduced dollar volatility in energy billing.
As BRICS trade increasingly bypasses the dollar, the INR/USD pair faces structural shifts. In 2025, close to half of intra-BRICS trade is settled outside the USD. This reduces dollar inflows into India, potentially weakening INR unless offset by export surpluses or capital inflows. From May to September, INR depreciated 4.7% against USD, partly due to reduced dollar liquidity from BRICS settlements. RBI may need to recalibrate its forex intervention strategy to manage this transition.
India’s forex reserves stood at $698.26 billion as of September 2025. Traditionally, over 60% of these are held in USD-denominated assets. With BRICS pushing de-dollarisation, India is gradually diversifying into gold and non-dollar assets. RBI’s gold assets rose by 57.12% YoY in 2025, reflecting this shift. If BRICS currency gains traction, India may reduce USD exposure by $30–50 billion, impacting its reserve management and sovereign risk metrics.
Dollar invoicing exposes Indian exporters to FX risk, requiring costly hedging. With BRICS enabling rupee or local currency settlements, hedging volumes have dropped. According to RBI’s August 2025 bulletin, forward cover volumes declined 23.4% YoY, saving exporters over ₹4,200 crore in premiums. This boosts competitiveness for MSMEs and reduces working capital strain. Sectors like pharma and engineering, which trade heavily with BRICS, are primary beneficiaries.
India’s trade with BRICS nations crossed $399 billion in the calendar year 2024. With INR settlements rising, India’s current account deficit (CAD) narrowed to 1.2% of GDP in Q2 2025, down from 1.3% a year earlier.
Reduced dollar outflows and improved terms of trade with Russia and South Africa contributed to this. If BRICS currency adoption expands, India could sustain a CAD below 2%, enhancing macroeconomic stability and reducing external vulnerability.
BRICS de-dollarisation offers India a buffer against potential US financial sanctions. By reducing reliance on SWIFT and dollar-clearing systems, India gains strategic autonomy. In 2025, RBI enabled direct rupee settlements with 23 countries, including sanctioned jurisdictions. This allows India to maintain trade continuity even under geopolitical stress.
While India remains cautious, the BRICS currency framework provides a fallback mechanism for critical imports like defence and energy.
With reduced dollar flows and rising rupee settlements, the RBI’s monetary toolkit is evolving. The policy repo rate was held at 5.50% in August 2025 to balance inflation and currency stability. However, de-dollarisation may require new instruments to manage rupee liquidity, FX volatility, and capital account openness. RBI is reportedly exploring rupee swap lines with BRICS banks to stabilise bilateral flows. This marks a shift from dollar- centric liquidity management.
BRICS’ currency and payment system could reshape the
in multiple ways. In the short term, de-dollarisation may create volatility in the INR/USD pair, which will directly impact IT, export-driven, and import-heavy sectors.
A weaker dollar reliance will reduce hedging costs for Indian exporters and will boost margins for pharma, engineering, textiles, and MSMEs, a positive sign for related stocks. However, reduced dollar inflows may pressure the rupee, affecting companies with high dollar debt.
Over time, local currency settlements and BRICS Pay could support India’s CAD stability and strengthen macro fundamentals to favour banking, fintech, and digital infrastructure stocks. RBI’s diversification of forex reserves into gold and non-dollar assets could also lift gold-related sectors.
If BRICS introduces a commodity-backed currency, energy pricing may shift, benefiting Indian oil importers.
For traders, expect near-term currency-driven volatility and opportunities in export-oriented and gold-linked stocks. Long-term investors should focus on sectors aligned with BRICS trade growth, digital payments, infrastructure, and strategic autonomy themes.
The BRICS currency plan is not an overnight replacement for the US dollar but a gradual shift toward financial independence. For India, this transition brings both opportunities and risks. Local currency settlements can lower hedging costs, improve trade efficiency, and support long-term market
stability. However, reduced dollar inflows may trigger short-term currency volatility. Overall, if managed carefully, this shift could strengthen India’s economic resilience and open new growth paths for key sectors in the stock market.
• India sets Sail for greater share in global shipping
Over 80% of global trade by volume and more than 70% by value moves by sea and is handled at ports according to UNCTAD review of Maritime Transport. In India, about 95% of trade by volume and 68% by value is carried by maritime transport. India’s 11,098km coastline hosts 12 major ports and 217 other than major ports (OMP’s). In the 90’s and early 2000’s, the first wave of port reforms was initiated in Africa, Asia and Latin America. India was no exception, and the privatisation of port operations at some major ports and by the State of Gujarat was initiated. At the request of the Indian Government, the World Bank found publicly run major ports under-performing global bench-marks, raising user costs and eroding India’s domestic and international competitiveness. Acting on this advice, JNPT invited global bids for a 600metre container terminal on BOT terms. In 1997, a consortium led by P & O Ports (later acquired by DP World) won the concession and formed Nhava Sheva International Container Terminal Pvt. Ltd. (NSICT). Over the last 29 years, about 100 BOT port projects have been approved in Indian major ports.
• On the first day of 2026, the Indian Government released around 185 new high-yielding seed varieties and hybrids across crops such as rice, maize, cotton, millets, pulses, oilseeds and sugarcane, aimed at raising agricultural productivity by expanding access to quality seeds. Of the 185 varieties released on Thursday, cotton seeds accounted for around two dozen hybrids and varieties approved for sale across major cotton-growing states such as Telengana, Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Punjab and Haryana. The move could help ramp up foodgrain production, including pulses and other crops.
• India, Bangladesh begin joint water measurements
India and Bangladesh on Thursday began joint water measurement on the Padma and Ganga Rivers as the 30-year Ganges Water Sharing Treaty entered its final year. The water measurement began
at a point 3,500ft upstream of the Hardinge Bridge on the Padma River in Bangladesh and also at the Farakka point in India.
• As Signs of Aging Emerge, Trump responds with Defiance. In an interview, President Trump, the oldest man to assume the office, said he has eschewed some advice from his doctors and regrets getting advanced imaging. He claimed His Gene’s are strong.
• Iranian Protestors killed as unrest turns violent on fifth day. Hard- liners have promised a harsher crackdown if protests spiral out of control.
• Indian Prime Minister Mr. Modi Tap’s India’s Consumer Power in trade fight with President Trump. The efforts of India’s PM to juice consumer spending and bolster the economy are showing signs of success.
• China signals it won’t give an inch to the U.S. in Latin America. Beijing is doubling down on its expansion just as President Trump tries to claim the Western Hemisphere as an exclusive sphere of influence for the U.S.
• Five Takeaways From China’s Military Drills Around Taiwan
• Beijing encircled the island this week and warned outsiders to stay away
• China’s steadily expanding military forces conducted large-scale drills around Taiwan this week, dispatching jet fighters, naval ships and coast guard vessels to encircle the island and firing rockets into nearby waters. China’s military announced the start of the “Justice Mission 2025” exercises on Monday morning and on Wednesday afternoon declared the drills “successfully completed.”
• The shadow fleet — and all its risks — will persist, no matter what happens in 2026
The shadow fleet will not be fully dismantled if there is peace in Ukraine. Iran and Venezuela are today’s top recruiters of ‘clean’ tonnage. Shadow fleet risks are not limited to the oil sector
• Greek owner plunges back into S&P market with Seacon bulker buy
Dexter Navigation buys its first kamsarmax for $26.7m. Piraeus- based Dexter Navigation has made its first vessel acquisition in two years. The Panapoulos family-owned company has bought the 82,000-dwt bulk carrier Seacon Shanghai (built 2019) for $26.7m, according to an exchange statement made by the Hong Kong- listed Chinese shipowner on 31 December.
• Cosco Shipping Specialised Carriers orders four MPP vessels worth $213m
Cosco Shipping Specialised Carriers has placed an order for a series of four heavy-lift multi-purpose vessels in response to the strong outlook for the wind power market. In a regulatory disclosure, the Shanghai-listed company said it has splashed out CNY 1.492bn ($213m) to order four 40,000-dwt MPPs fitted with heavy lift cranes at Chengxi Shipyard.
• US sanctions four Chinese-owned tankers in latest Venezuela pressure move
The measures are just the latest step in the US campaign against President Nicolas Maduro. The United States has sanctioned four Chinese shipping companies and their Treasury said the four companies were all operating in The Venezuela’s oil sector and some of the listed vessels were part of its shadow fleet.tankers in its latest strike against Venezuela’s crude exports. Donald Trump’s administration sanctioned companies based in Hong
Kong and mainland China, along with related oil tankers,
for evading restrictions on Venezuela’s oil exports. Targeting Chinese firms doing business there is rare, and may be a signal to Beijing to steer clear of the stand-off between the US and the regime of Nicolás Maduro.
• LNG charter rates slide as year closes: What does 2026 hold?
‘Freight volatility’ or ‘disaster movie’ — challenges await in the coming 12 months. Spot charter rates for modern LNG carriers have slipped at the end of the year, following their unexpected six- figure rally in November and earlier this month, and a challenging 2026 could lie ahead.
• Russia’s Strikes on Odesa Aim to Cut Ukraine’s Economic Lifeline
• The deadly attacks on a crucial trade hub come as the U.S. peace effort continues.
KYIV, Ukraine—A day before President Volodymyr Zelensky made his case for more American support at President Trump’s Mar-a- Lago resort over the weekend, Russia slammed another wave of drones into a slice of Ukraine’s own prime beachfront real estate: the Black Sea port of Odesa.
Throughout December, Russian strikes have homed in on Odesa, the chief hub for Ukraine’s grain exports and its economic lifeline to the rest of world. The attacks have damaged infrastructure, storage reservoirs and power grids, in addition to killing and injuring dozens of people. Analysts say they reflect how Russia is increasingly seeking out ways to degrade Ukraine’s economy.
• India’s First Chip Factory
It is being built at Dholera, Gujarat and will make chips for mobiles, cars, 5G Defence and Space programs – a big step towards self- reliant India.
• How the Past Shadows China’s Future
The biggest questions in U.S. foreign policy today tend to be about China. Policymakers and analysts argue over the implications of China’s rise, the extent of its ambitions, the nature of its economic influence, and the meaning of its growing military strength.
Underlying these arguments is a widespread sense that whereas Beijing once seemed likely to slot comfortably into a U.S.-led international order, it now poses a profound challenge to American interests.
No one brings more perspective to these arguments than the historian Odd Arne Westad, has explored the drivers of China’s foreign policy, its approach to global power, and its fraught ties with the United States. He sees in the long arc of Chinese and global history a stark warning about the potential for conflict, including a war between China and the United States.
Westad also sees in this history lessons for policymakers today about how to avert such an outcome. Dan Kurtz-Phelan spoke to Westad about China’s complicated past, about how that history is defining its role as a great power, and about the paths both to war and to peace in the years ahead.
• Can Cold War History Prevent U.S.- Chinese Calamity?
Learning the Right Lessons of the Past!
In February 1961, at the outset of his presidency, John F. Kennedy wrote a personal letter to the Soviet leader Nikita Khrushchev. While deploring the overall state of affairs in relations between the two countries, the new president argued that “if we could find a measure of cooperation on some of these current issues this, in itself, would be a significant contribution to the problem of insuring a peaceful and orderly world.” Kennedy went on to explain how the two leaders could achieve such cooperation:
I think we should recognize, in honesty to each other, that there are problems on which we may not be able to agree. However, I believe that while recognizing that we do not and, in all probability will not, share a
common view on all of these problems, I do believe that the manner in which we approach them and, in particular, the manner in which our disagreements are handled, can be of great importance…. I believe we should make more use of diplomatic channels for quite informal discussion of these questions, not in the sense of negotiations …, but rather as a mechanism of communication which should, insofar as is possible, help to eliminate misunderstanding and unnecessary divergencies, however great the basic differences may be.
Kennedy’s approach back then helped save the peace, even during some of the darkest moments of the Cold War. Today, leaders of the United States and China must take a similar approach—as both sides seemed to acknowledge at the recent “virtual” summit. “It seems clear to me,” said U.S. President Joe Biden, “that we need to establish some common-sense guardrails.” Chinese President Xi Jinping agreed: “China and the United States need to increase communication and cooperation.”
The question of whether U.S.-Chinese competition bears much resemblance to the Soviet-American Cold War has become highly contested. When a group of American and Chinese historians of the Cold War (the two of us included) met last summer to discuss the comparison, there was considerable disagreement about both the accuracy and value of the analogy. But most agreed that it offered at least some lessons for managing tensions between the United States and China today. Given how intense and dangerous the rivalry between today’s two great powers has become, rather than fixating on disagreements about the analogy, both scholars and policymakers should consider those lessons—especially when it comes to the essential tasks of facilitating stability and reducing the risk of unnecessary conflict.
Strategic misunderstanding—of the intentions and capabilities of rivals, of the international situation, even of one’s own position—played a major role in the escalation of the Cold War.
Both the United States and the Soviet Union over-emphasized the aggressive intentions of the other and stressed irreconcilable domestic political, institutional, and cultural differences as justification for massive military build-ups. Guided by grand narratives that stressed confrontation, both frequently misinterpreted the other’s motives.
• The 10 Most Important Energy Stories of 2025
Energy fundamentals, rather than policy narratives or geopolitics, dominated outcomes across oil, gas, and power markets.
Infrastructure constraints, especially grids and LNG capacity, emerged as decisive bottlenecks for growth and transition.
The energy transition continued, but more slowly and unevenly, as economics, reliability, and consumer behaviour reasserted their influence.
If 2025 taught us anything, it was that energy markets remain governed by fundamentals, not slogans. The year opened with expectations of policy-driven disruption and geopolitical shocks. It closed with supply, demand, and infrastructure constraints doing what they usually do: overruling expectations. Oil prices fell even as global tensions persisted. Electricity demand grew faster than grids could react. And technologies widely assumed to be on borrowed time proved far more durable than many forecasts suggested.
Rather than breakthroughs or collapses, 2025 was a year of friction. Policy goals ran into physical limits. Ambitious timelines collided with capital costs and permitting delays. And market outcomes repeatedly diverged from the narratives built around them. U.S. oil production reached record levels without a drilling boom. OPEC’s ability to steer prices weakened. Artificial intelligence emerged as a material driver of electricity demand. And the energy transition slowed—not because it failed, but because economics and reliability reasserted their influence.
What follows are the ten energy stories that best captured those tensions—and that readers engaged with most over the course of the year. Taken together, they explain not just what happened in energy markets in 2025, but why investors, policymakers, and producers are heading into 2026 with very different assumptions than they held twelve months earlier.
- U.S. oil production set a modest new record
U.S. crude oil production hit fresh all-time high’s in 2025, extending America’s position as the world’s top producer. In its October Short-Term Energy Outlook, the U.S. Energy Information Administration
reported that output reached more than 13.6 million barrels per day in July 2025. After averaging 13.2 million bpd in 2024, as of December 12, 2025 the EIA reports that year-to-date production had averaged 13.5 million bpd—about 2% higher than a year ago. That means that by the last week of December, the U.S. had set a new production record for the year.
What made the milestone notable was how it happened. Prices softened. Rig counts stayed restrained. Capital budgets remained tight. The gains came instead from longer laterals, better reservoir targeting, and incremental efficiency layered onto an already massive shale base. The era of explosive growth may be over, but the era of high-output, capital-disciplined shale is not.
- OPEC+ discovers its limits in a world of abundant supply
If 2022–2023 were about OPEC+ managing post-pandemic volatility, 2025 underscored how constrained the cartel’s leverage has become. Repeated extensions of voluntary production cuts ran into a blunt reality: non-OPEC supply—especially from the United States, Brazil, Guyana, and Canada—continued to grow, while demand expectations were repeatedly revised down on weaker industrial activity and efficiency gains.
The net result was a year in which oil prices often failed to respond durably to OPEC+ announcements, reinforcing a shift from a supply- managed market to one where diversified production and slower demand growth dilute cartel influence. That dynamic didn’t make OPEC+ irrelevant, but it did make its interventions shorter-lived and more expensive in terms of lost market share. - Oil prices shrug off a world on edge
Wars in Europe and the Middle East, Red Sea shipping disruptions, and recurring headline risk from key producers might have once guaranteed a sizable risk premium in crude. In 2025, markets largely refused to pay it. For much of the year, Brent traded in a range that reflected comfortable inventories and robust non-OPEC supply more than it did geopolitical anxiety.
Episodes of price strength typically faded as traders focused on tepid demand growth in China and Europe, improving fuel efficiency, and a structural expectation that supply disruptions would be met by spare capacity and nimble U.S. producers. The longer-term consequence:
geopolitical “shock value” still moves prices day-to-day, but structural
fundamentals are increasingly in the driver’s seat.
- AI data centers turn electricity demand into a strategic variable
Artificial intelligence increasingly shifted from a tech story to an energy story in 2025. A wave of hyperscale data centers—many expressly built for AI training and inference—began to reshape regional load forecasts, pushing utilities and grid operators to revisit assumptions that demand growth would remain modest and flat.
In fast-growing hubs, incremental demand from data centers alone rivalled that of entire mid-sized cities, compressing planning timelines and forcing hard choices about resource adequacy. The result was a renewed focus on reliable, around-the-clock power: natural gas plants extended their relevance, nuclear assets gained new strategic value, and firm, dispatchable capacity quietly re-entered the policy conversation after years of headline dominance by variable renewables. - The grid becomes the system’s binding constraint
In 2025, the biggest energy bottleneck wasn’t a lack of projects; it was the wires to connect them. Interconnection queues across North America swelled to hundreds of gigawatts of proposed wind, solar, storage, and gas, with developers facing multi-year waits for studies and upgrades.
Congestion and curtailment increased in high-renewables regions, while reliability warnings from system operators turned transmission and distribution from a niche engineering concern into a mainstream policy issue. For investors and policymakers, the lesson was unavoidable: adding more generation—clean or otherwise—doesn’t solve much if power can’t move to where it’s needed. Grid modernization and permitting reform shifted from footnotes to center stage in long-term energy strategy.
- U.S. LNG wave hits global gas markets
After years of construction, the next wave of U.S. LNG export capacity finally began to flow meaningfully into the global market in 2025. New trains and terminals that reached commercial operation tightened the link between U.S. Henry Hub pricing and European and Asian benchmarks, giving Europe more diversified supply options while exposing U.S. producers and consumers more directly to global cycles. For American gas producers, expanded export capacity offered a vital outlet for surging associated gas, but domestic hub prices remained
under pressure at times, reflecting just how prolific upstream supply has become. The LNG “super-cycle” turned into a nuanced story: security and optionality for buyers, but margin pressure and cyclical risk for suppliers.
- Offshore wind confronts the realities of cost, risk, and politics
Offshore wind entered 2025 with ambitious pipelines and strong rhetoric; it ended the year as one of the sector’s starkest reality checks. Higher interest rates, supply-chain inflation, vessel and port bottlenecks, and community opposition converged on a technology that is both capital- intensive and policy-dependent.
Several high-profile U.S. projects faced delays, contract renegotiations, or cancellations, while auction rounds in some markets saw weaker- than-expected participation or more cautious bidding. None of this killed the offshore wind story, but it did reframe it from an inevitability narrative to one centered on execution risk, cost of capital, and the need for more durable policy frameworks that can survive macroeconomic swings. - EV growth proves human behaviour beats spreadsheets
Electric vehicle sales continued to grow in 2025, but not at the pace envisioned by the most aggressive policy scenarios. Affordability concerns, charging infrastructure gaps, and consumer range anxiety slowed the march toward full electrification in key markets, particularly for mass-market buyers.
Hybrids—especially efficient, non-plug-in models—gained share as a “good enough” option that reduced fuel use without demanding lifestyle change or new charging habits. Automakers responded by rebalancing product portfolios and investment plans, and by stretching timelines for internal-combustion phaseouts. For oil markets, the implication was subtle but important: the inflection point for structural demand erosion moved a bit further out on the horizon. - Energy M&A pivots to surgical precision
After a run of mega-mergers that reshaped the upper tier of the oil and gas industry, 2025’s dealmaking tilted toward precision rather than sheer size. Public companies looked to bolt-on acquisitions to deepen drilling inventories in their best basins, tidy up lease maps, or add specialized capabilities in areas like carbon management, LNG, or deepwater operations.
Private equity exits continued, but buyers were more disciplined on price and choosier about geology and break-even costs. The common thread was capital discipline: investors rewarded free-cash-flow stability and balance-sheet strength more than empire building, pushing management
teams to favour targeted, accretive deals over splashy consolidations for their own sake.
- Energy policy gets more pragmatic
By late 2025, energy policy in the United States and other major economies looked more pragmatic than ideological. Approvals
for incremental LNG exports, revived interest in certain pipeline projects, and a more measured tone around the pace of the energy transition suggested policymakers were increasingly focused on reliability, affordability, and security alongside decarbonization.
Yet upstream producers and midstream developers remained constrained by capital discipline, shareholder return expectations, and long project lead times. The gap between what policy allowed and what markets delivered became one of the year’s defining themes: governments can shape the playing field, but investment decisions—and ultimately production—are still made by individual companies.
Final Thoughts
The defining lesson of 2025 was not that energy markets defied expectations, but that they followed their usual rules. Systems built over decades do not pivot on press releases. Infrastructure expands slowly. Capital responds selectively. Consumers adopt change on their own terms.
As 2026 approaches, the gap between aspiration and execution remains wide. The energy transition continues, but unevenly and under constraint. Traditional energy remains essential but increasingly optimized rather than expanded. For those watching the sector closely, the message is clear: energy outcomes are still shaped less by what policymakers promise than by what physics, economics, and balance sheets allow.
• Oil Prices Rise Slightly in Early 2026 After Worst Annual Decline Since 2020
• Oil prices edged up slightly in the first trading day of 2026 after last year posted the largest annual drop since 2020.
According to market reference sources, Brent futures rose by $0.35 to
$61.20 a barrel, while WTI traded at $57.76 a barrel, up $0.34 from the previous session.
For 2025, Brent and WTI prices posted nearly 20% annual losses – the worst performance since 2020, as supply outpaced demand and geopolitical risks outweighed. This is the third consecutive year Brent has fallen, and it marked the longest streak of declines in trading on record.
• Current State and Price Formation Factors
According to senior market analyst Priyanka Sachdeva of Phillip Nova, the modest pace of price growth reflects a tug-of-war between near-term geopolitical risks and longer-term fundamentals that point to an oversupply ahead of next week’s OPEC+ meeting.
Among geopolitical risks for the oil market, the agency highlights the protracted war in Ukraine, where Kyiv is intensifying strikes on Russia’s energy infrastructure, and rising pressure from the United States on Venezuela, in particular the imposition of sanctions on oil companies and the tankers linked to them operating in the Venezuelan sector.
According to ANI, oil prices on December 31 rose somewhat, but overall for 2025 they fell by more than 15% due to supply outpacing demand.
• Nearly 60% of Poles Doubt War Will End in 2026
Nearly 60% of Polish citizens do not believe that the war unleashed by Russia against Ukraine will end in 2026.
According to an IBRiS center poll conducted for the publication, 59.6% of respondents do not expect the war to end in 2026, 21.6% have a different opinion, and 18.9% are undecided on this matter.
Among those who view the prospects for peace in 2026 pessimistically, supporters of the current left-liberal coalition predominate (64%), men (62%), young people aged 18–30 (84%), and 40-year-olds (78%).
Prospects for peace from the perspective of Poles
Commenting on the results, the Polish expert, a retired general Roman Polko, noted that Poles assess the situation realistically, considering the mentality of the Russians and the experience of the so-called “Soviet peace.”
Hoping 2026 is a Peaceful Earth to live in, Happy New Year !
Limited Baltic Report due to the Vacations:
Baltic Exchange Panamax 82 Asia Index – 02 January 2026
Route Description Size (MT) Value($) Change
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P5_82 S.China one Indo RV 7,263 +160
Baltic Exchange Supramax Asia Index – 02 January 2026
Route Description Value($) Change
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S2_63 N.China one Austr or Pac RV 10,786 -1,689 S8_63 S.China via Indonesia/Ec India 11,396 -1,447 S10_63 S.China via Indo/S.China 9,050 -1,400
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S3TC Weighted Time Charter Average 10,459 -1,535
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