Global gas demand to fall 0.5pc as tighter supply raises prices: IEA

LONDON: Global natural gas consumption is forecast to fall 0.5 percent this year, mainly because higher prices are curbing demand from power generators and industry after the US-Iran conflict tightened supplies, the International Energy Agency (IEA) said on Tuesday.

Global gas demand is expected to fall by around 0.5 percent, or 20 billion cubic metres, in 2026, marking the third annual decline this decade after decreases in 2020 and 2022, the IEA said in its third-quarter 2026 Gas Market Report.

Gas demand in Asia fell around 1 percent 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 percent year-on-year to average nearly USD 16 per million British thermal units, while spot LNG prices in Asia increased 45 percent to an average of USD 17.5/mmBtu.

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

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

However, 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 percent in the March-June period compared with the same four months in 2025.