Global Gas Demand to Rise in 2026 as LNG Supply Grows: IEA

Global demand for natural gas will recover in 2026 after a muted 2025, the International Energy Agency (IEA) says. The recovery will be led by a sharp rise in liquefied natural gas (LNG) production from the big producers like the United States, Canada and Qatar. The agency forecasts 2 percent world gas demand growth in 2026, above the 1.3 percent growth of 2025 and 2.8 percent of 2024.

In its recent Gas Market Report, the IEA stated that the tight market conditions continued throughout the first half of 2025. European markets were haunted by supply deficits as a result of lowered pipeline imports from Russia, as well as the necessity of injecting more gas into storage. LNG production growth continued to be held back, keeping global supply low and prices high. In spite of all this, European gas demand rose 6.5 percent compared with the previous year mainly because of increased use of power generation from gas with less wind and hydro power generation. The IEA, however, reported that the trend cannot be taken as long-term since it is largely the result of short-term fluctuation in electricity production.

In North America, demand went up by some 2.5 percent during the first half of 2025 due to colder-than-usual winter temperatures that raised the consumption of gas in domestic and commercial buildings. Demand decreased by 1 percent in China, while LNG imports dropped by more than 20 percent. The drop signals the price sensitivity of various Asia-Pacific nations.

The IEA forecasts that the biggest yearly increase in LNG supply since 2019 will be in 2026, with a forecasted 7 percent increase valued at 40 billion cubic metres. The supply increase is considered to play a key role in satisfying the price-sensitive demand, especially from Asia. The continent will also be leading global gas demand in 2026, following sharply reduced demand this year.

The report covers analysis of the Middle East, where there have been persistent geopolitical tensions that have contributed to volatility in international gas markets. The IEA cautioned that although greater LNG supply could ease the market tightness, overall the outlook is still fragile against economic uncertainties and possible further geopolitical shocks.

With new export terminals and facilities coming online, the global gas market should see a phase of rebalancing. But the agency said that various elements may still affect the estimate, including macroeconomic conditions and energy transition policy among large economies. On a near-term basis, the IEA says that the global gas market will still be contending with a multi-polar world with supply restraint, regional demand imbalances, and volatile prices.

Source:
IEA Gas Market Report, July 23, 2025.
Credits: Nirmal Menon