Global demand for natural gas is expected to accelerate in 2026, rebounding from a slower 2025, as new liquefied natural gas supply from major exporters including the United States, Canada and Qatar eases tight market conditions, the International Energy Agency said in a report on Tuesday.
The IEA’s latest Gas Market Report forecasts global gas demand growth will rise to around 2 percent in 2026, up from a projected 1.3 percent in 2025 and down from 2.8 percent in 2024.
The agency attributed the near-term slowdown to elevated prices, subdued growth in LNG supply and continued macroeconomic headwinds.
“The wave of LNG supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. “However, our latest forecast is subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment.”
Market Tightness Persists in 2025
Gas markets remained constrained in the first half of 2025, the IEA said, as Europe faced reduced pipeline imports from Russia and increased storage injection needs. Limited growth in LNG production further tightened supply balances.
Europe’s natural gas consumption rose by 6.5 percent year-on-year, supported mainly by the power sector, where reduced output from wind and hydroelectric sources prompted a heavier reliance on gas-fired plants.
“This should not be interpreted as a structural trend,” the report said, “but it underscores the role of gas in balancing grids with higher shares of variable renewables.”
In North America, demand increased by an estimated 2.5 percent in the first half of 2025, largely due to colder winter temperatures that boosted consumption in buildings.
Conversely, China saw gas demand fall by 1 percent and LNG imports plunge by more than 20 percent, reflecting the continued sensitivity of the Asia-Pacific region to high prices.
LNG Supply Set for Record Expansion
The IEA projects that global LNG supply will expand by 7 percent, or 40 billion cubic meters, in 2026 – the largest annual increase since 2019. The additional supply is expected to unlock stronger demand in price-sensitive Asian markets.
The report highlighted that Asia, where LNG often meets marginal demand, is poised to be the main driver of global gas consumption growth in 2026, reversing the sharp slowdown seen this year.
Middle East Tensions Raise Volatility
The IEA included a special section on the Middle East, noting that geopolitical tensions in the region have contributed to recent price volatility and supply risks. The agency stated that it continues to monitor developments and collaborate with global partners to ensure gas supply security.
Despite the anticipated supply-driven easing in market conditions, the IEA cautioned that the outlook remains fragile amid ongoing macroeconomic uncertainty and evolving geopolitical risks.
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