Global Gas Demand to Decline by 0.5% in 2026: Impact on Energy Markets

The International Energy Agency (IEA) forecasts that global natural gas consumption will decrease by 0.5% in 2026. According to the IEA's 2026 third-quarter Gas Market Report, this decrease will result in a drop of approximately 20 billion cubic meters in global gas demand. This marks the third consecutive annual decline, following the drops in 2020 and 2022. In Asia, gas demand declined by about 1% year-on-year in the first half of 2026. High prices encouraged fuel switching, particularly in the electricity sector, where there was an increase in the use of coal. Europe's benchmark price, TTF, and Asia's Platts JKM indicator reached record highs, with both seeing their highest second-quarter averages since 2022. TTF rose by 32% year-on-year, reaching an average of $16 per million British thermal units. Spot LNG prices in Asia surged by 45%, averaging $17.5 per million British thermal units. The US-Iran conflict significantly reduced LNG flows through the Strait of Hormuz, a key route that normally carries around 20% of global LNG supply. Global LNG supply is expected to remain at 2025 levels throughout the year, as increased production in other regions offsets the disruptions in the Gulf. The report warned that if the Strait is not fully reopened before the fourth quarter, global LNG supply could decline, which would be the first annual drop since 2012. LNG supply from Qatar and the United Arab Emirates plummeted, with production in the March-June period falling by nearly 80% compared to the same period in 2025. These developments in the energy markets could have significant implications for the global economy and energy security. The Hormuz Crisis and the decline in LNG supply could drive up energy prices and affect energy-dependent sectors. This situation may be a critical time for energy policy and investment decisions. Energy experts and policymakers should closely monitor these developments and be prepared to take necessary steps to ensure energy security.