IEA: Global natural gas demand growth set to accelerate in 2026 as more LNG supply comes to market

The report provides a short-term outlook for natural gas supply, demand, trade, and more in 2025 and 2026. It finds that market fundamentals remained tight in 1H25 due to a combination of lower Russian piped gas exports to the EU, relatively modest growth in LNG output and higher storage injection needs in Europe.

In this context, and amid elevated macroeconomic uncertainty, global natural gas demand growth is forecast to slow from 2.8% in 2024 to around 1.3% in 2025. The increase this year is expected to be almost entirely driven by North America and Europe, with the growth in consumption in the Asia-Pacific region – where many markets tend to be sensitive to higher prices – falling to its weakest annual rate since the energy crisis in 2022.

The report sees global demand growth picking up again in 2026 and accelerating to around 2% as a considerable increase in LNG supply eases market fundamentals and fosters stronger demand growth in Asia. In 2026, LNG supply is set to rise by 7%, or 40 billion m³ – its largest increase since 2019 – as new projects come online in the US, Canada, and Qatar.

The report includes a special section on the role of the Middle East in global gas markets, noting that geopolitical tensions in the region have fuelled recent price volatility.

“The backdrop for global gas markets is shifting as we enter 2H25 and look towards 2026. The wave of LNG supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia,” said IEA Director of Energy Markets and Security, Keisuke Sadamori. “However, our latest forecast is subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment. The IEA continues to monitor gas markets closely and to work with stakeholders around the world to support security of supply.”

In 1H25, global natural gas consumption in Europe increased by 6.5% y/y, primarily supported by the electricity sector amid lower power generation from wind and hydro. While this should not be interpreted as a structural trend, such episodes highlight the key role gas-fired power plants often play in ensuring electricity supply security in markets with higher shares of variable renewables.

In contrast, China’s natural gas demand declined by an estimated 1% y/y, with the county’s LNG imports plunging by more than 20%. In North America, natural gas demand increased by an estimated 2.5% from the same period a year earlier. Growth was concentrated in 1Q25, when colder weather boosted gas use in buildings.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/22072025/iea-global-natural-gas-demand-growth-set-to-accelerate-in-2026-as-more-lng-supply-comes-to-market/