Fragile gas markets set for slower growth in the coming years.

Natural gas markets are also in a fragile state after a series of recent issues, including labour strike risks in Australia, production disruptions in Israel after the Hamas attack, and damage to a key pipeline in the Baltic.

Beyond these immediate strains, global demand growth for gas is set to slow in the coming years, according to our new Medium-Term Gas Report. The global energy crisis triggered by Russia’s invasion of Ukraine has ushered in significant changes for gas markets after their decade of strong growth between 2011 and 2021. Global gas demand is on course to increase by an average on 1.6% a year between 2022 and 2026, down from an average of 2.5% a year between 2017 and 2021, the report forecasts. This is set to lead to a peak in demand by the end of this decade, based on today’s policy settings.

Demand in mature markets across the world has already peaked and is projected to decline by 1% annually through to 2026, the consequence of factors including the accelerated rollout of renewables and improved energy efficiency. For Europe specifically, the loss of piped gas from Russia pressed governments to seek alternative solutions to maintain energy security.

This means growth is expected to be concentrated in fast-growing Asian markets as well as some gas-rich economies in the Middle East and Africa. China alone is expected to account for almost half of the total growth in global gas demand between 2022 and 2026.

In the nearer term, the report cautions that uncertainty and risks remain in gas markets, notably for the coming winter in the Northern Hemisphere. This is despite the gradual market rebalancing that began to take place earlier this year.