European natural gas prices and Asian spot LNG prices spiked to record highs in the third quarter of 2022. This reduced gas demand and incentivised switching to other fuels such as coal and oil for power generation. In some emerging and developing economies, the tight supply and high prices triggered shortages and power cuts.

The current tightness in natural gas markets around the world is set to continue well into 2023 as a sharp reduction of Russian supplies to Europe intensifies global competition for liquefied natural gas (LNG) shipments. Gas storage facilities in the European Union are now over 90% full on average, which provides some reassurance for the coming winter, but risks remain for Europe in the event of new supply disruptions or severe cold spells. Looking further ahead, the absence of Russian supplies and an expected increase in Chinese demand for LNG will make refilling EU storage facilities difficult once the heating season is over.