Global natural gas demand is rising more sharply in 2024 compared to the past two years, which were significantly impacted by the global energy crisis. However, new gas supplies remain constrained due to slow LNG production growth, while ongoing geopolitical tensions continue to drive price fluctuations, according to a recent IEA review on global gas markets and security.

The IEA forecasts a global gas demand increase of over 2.5% in 2024, with similar growth expected in 2025. Much of this rise is driven by rapidly growing markets in Asia, alongside a recovery in Europe’s industrial gas demand, although it remains well below pre-crisis levels. The review also includes the IEA’s latest quarterly Gas Market Report.

IEA Director of Energy Markets and Security, Keisuke Sadamori, noted, “The global gas demand growth we’re seeing this year and next is part of the recovery from the energy crisis, but the demand-supply balance is fragile, and volatility risks remain. Producers and consumers need to collaborate closely during these uncertain times, while also advancing clean energy transitions for a secure and sustainable future.”

The report highlights the sensitivity of markets to unforeseen supply and demand changes. LNG has become increasingly important in global gas trade since the energy crisis began and will continue to play a key role in maintaining supply-demand balance. Shipping challenges through the Panama Canal and the Red Sea have not yet impacted LNG supply, but they underscore potential vulnerabilities in the global LNG market. LNG supply is expected to grow nearly 6% in 2025 as major projects come online, especially in the second half of the year, with North America being the largest contributor to new capacity.

A major uncertainty for the 2024-25 winter is the transit of Russian gas via Ukraine, as existing contracts end in 2024. If this results in a halt to piped gas deliveries to Europe, it would increase Europe’s reliance on LNG imports in 2025, tightening the global gas market. The IEA suggests improving flexibility mechanisms in gas and LNG value chains, enhancing global LNG market liquidity, integrating Ukraine’s gas storage into the global market, and considering voluntary gas reserve frameworks to address these challenges.

This year’s review also includes an analysis of integrating low-emission gases into the transport sector, part of the IEA’s Low-Emissions Gases Work Programme.

In addition to its market analysis, the IEA collaborates with governments worldwide to support supply security. Since its formation in October 2022, the IEA’s Task Force on Gas and Clean Fuels Market Monitoring has provided vital market updates and served as a platform for data and information exchange. The Task Force worked with Japan ahead of the 13th LNG Producer-Consumer Conference, co-organized by the IEA and Japan’s Ministry of Economy, Trade, and Industry.