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IEA Projects 0.5% Decline in Global Natural Gas Demand for 2026
Global natural gas demand is projected to fall by 0.5%, or approximately 20 billion cubic meters, in 2026, according to the International Energy Agency (IEA). In its third-quarter 2026 Gas Market Report released Tuesday, the agency noted that this would be the third time gas demand has declined in a single year this decade, following previous drops in 2020 and 2022.
The anticipated decrease is primarily attributed to higher prices, which have curtailed demand from industrial users and power generators. The IEA report links the price surge to tightened supplies resulting from the U.S.-Iran conflict, which has affected key shipping routes for liquefied natural gas (LNG).
The impact of higher prices was evident in the first half of 2026, particularly in Asia, where gas demand fell by around 1% as some consumers switched to other fuels like coal. During the second quarter, Europe’s TTF benchmark price rose 32% year-on-year to an average of nearly $16 per million British thermal units (mmBtu), while spot LNG prices in Asia increased by 45% to an average of $17.5 per mmBtu.
AdSupply has been significantly impacted by disruptions to LNG flows through the Strait of Hormuz, a route that typically handles about 20% of global LNG supplies. The report highlights that LNG output from Qatar and the United Arab Emirates dropped by nearly 80% between March and June compared to the same period in 2025.
Despite these disruptions, the IEA expects global LNG supply for the full year to remain largely unchanged from 2025, as increased production in other regions is anticipated to offset the shortfalls. However, the agency cautioned that if the Strait of Hormuz is not fully reopened before the fourth quarter, global LNG supply could experience its first annual decline since 2012.