The global gas market looks tight and here’s why

Global gas consumption reached a record in 2024, with an increase of 2.8%, according to the International Energy Agency.

Global natural gas consumption hit an all-time high in 2024, and the appetite for gas is expected to grow further in 2025, according to a report Tuesday from the International Energy Agency (IEA) which expects markets “tense” this year.

What is the situation?

The world consumed 115 billion m³ of natural gas (of fossil origin) more than in 2023, an increase of 2.8% well above the average growth rate of 2% from the years 2010 to 2020, indicated the IEA based on preliminary data in its quarterly gas market report.

In October, the IEA estimated global gas consumption at 4,200 billion m³ pour 2024.

According to initial estimates, gas covered “around 40% of the increase in global energy demand”, a higher share than any other fuel, indicates the IEA, the OECD energy agency based in Paris.

Why this situation?

Gas “continues to replace oil and petroleum products in various sectors”, such as long-distance road transport and the power generation sector says the IEA. Gas combustion results in fewer CO2 emissions than coal and oil.

Gas demand is expected to further “increase in 2025, mainly thanks to the rapid growth of Asian markets,” explains the IEA, which emphasizes that “at the same time, the global gas balance remains fragile, with supply remaining tight and geopolitical tensions continuing to fuel price volatility.

What is the impact of the war?

The IEA also notes that while the cessation of the transit of Russian gas through Ukraine on January 1, 2025 “should not constitute an imminent risk for the security of supply of the European Union, it could increase the needs for ‘import liquefied natural gas (LNG) from the EU and tighten market fundamentals this year’.

This gas in liquid form transported via LNG ships is highly coveted in Asia as well as in Europe, which has had to compensate since the start of the war in Ukraine in 2022 for the lack of Russian gas, historically transported to the West in onshore gas pipelines. However, European LNG imports fell by 18% in 2024.

Who is the world champion?

The United States maintains its position as the leading supplier to Europe, despite an 18% drop in demand, followed by Russia whose supplies of this liquid gas to Europe, mainly transported from the Siberian mega-field of Yamal LNG, on the contrary, increased by 17%.

Belgium, France and Spain accounted for 85% of Europe’s total LNG imports from Russia in 2024. (jah/ats)