World Gas Use to Hit Record in 2025 Amid Fight for LNG, IEA Says

The International Energy Agency (IEA) has forecasted that global gas demand will reach a record high in 2025, driven by increased consumption in emerging markets and a tight supply-demand balance in the LNG market. This article explores the key factors contributing to this growth and the implications for the global gas market.

The economic rebound in emerging markets, particularly China and India, is expected to be a significant driver of global gas demand. As these countries recover from the COVID-19 pandemic, they are projected to experience strong economic growth, which will in turn boost energy demand. The increased availability of lower-priced natural gas is also likely to play a crucial role in driving demand, especially in price-sensitive industrial sectors.

However, the limited new LNG production capacity is set to impact the supply-demand balance, potentially leading to price volatility in 2024 and 2025. Delays in new liquefaction plants and issues surrounding the availability of feedgas at existing projects are expected to push back supply growth to 2025. This tight supply situation, coupled with growing demand, could significantly contribute to price fluctuations throughout the year.

Geopolitical risks and uncertainties, such as those in the Middle East and the Russia-Ukraine conflict, could also affect global gas markets and demand projections. The ongoing tensions between Russia and Europe have already had a significant impact on European gas prices and security of supply. Any further disruptions or escalations in these geopolitical hotspots could have far-reaching consequences for the global gas market.

In conclusion, the IEA's forecast of record-high global gas demand in 2025 highlights the importance of addressing the challenges posed by limited LNG production capacity and geopolitical uncertainties. As the world emerges from the energy crisis, it is crucial for stakeholders to work together to ensure a stable and secure global gas market.