Global gas demand to fall 0.5% in 2026, IEA says

Investing.com -- Global natural gas consumption is forecast to decline 0.5% this year, mainly due to higher prices that are reducing demand from power generators and industry after the U.S.-Iran conflict tightened supplies, the International Energy Agency said Tuesday.

The agency said global gas demand is expected to drop by around 20 billion cubic metres in 2026, marking the third annual decline this decade following decreases in 2020 and 2022, according to its third-quarter 2026 Gas Market Report.

Gas demand in Asia fell around 1% year-on-year in the first half of 2026 as higher prices encouraged fuel switching, particularly to coal in the power sector.

Europe's benchmark TTF price and Asia's Platts JKM benchmark both recorded their highest average second-quarter prices since 2022. TTF rose 32% year-on-year to average nearly $16 per million British thermal units, while spot LNG prices in Asia increased 45% to an average of $17.5 per mmBtu.

The U.S.-Iran conflict has sharply reduced liquefied natural gas flows through the Strait of Hormuz, a shipping route that typically carries about 20% of global LNG supplies.

Global LNG supply for the full year is expected to remain broadly unchanged from 2025 as increased production in other regions offsets disruptions in the Gulf.

If the Strait is not fully reopened before the start of the fourth quarter, global LNG supply could record its first annual decline since 2012, the report said.

LNG supply from Qatar and the United Arab Emirates has fallen sharply, with output down almost 80% in the March-June period compared with the same four months in 2025.

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