The International Energy Agency’s latest Gas Market Report signals a challenging year ahead for global natural gas markets. Demand is expected to climb, driven by rapid growth in Asia, while supply struggles to keep pace amidst geopolitical tensions and lingering impacts of the energy crisis. Investors and industry leaders must navigate a volatile landscape as global gas balances remain fragile, heightening the urgency for international cooperation to safeguard energy security.
The IEA’s analysis highlights the gradual recovery of gas markets in 2024 following the disruption caused by Russia’s invasion of Ukraine in early 2022. However, the report underscores that this recovery has been uneven, leaving markets vulnerable. Global gas demand surged by 2.8% in 2024—well above historical averages—fuelled primarily by expanding consumption in Asia. Meanwhile, limited growth in liquefied natural gas (LNG) capacity kept supplies tight. Extreme weather events compounded market pressures, a trend expected to persist in 2025 until a new wave of LNG export projects, spearheaded by the United States and Qatar, begins to come online later in the decade.
Geopolitical uncertainties continue to shape market dynamics, with the cessation of Russian piped gas transit through Ukraine at the start of 2025 further amplifying volatility. While the European Union’s immediate energy security appears stable, it faces rising LNG import needs, intensifying global competition for supply. The report draws attention to the heightened vulnerability of Moldova, calling for stronger regional and international coordination to ensure adequate energy supplies during the coming winter.
Slower growth in global gas demand is anticipated for 2025, projected to fall below 2%. As in previous years, Asian markets will lead this growth, contributing over half of the anticipated increase. Yet the slow pace of LNG capacity expansion, combined with unpredictable geopolitical developments, underscores the need for continued vigilance.
Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, emphasised the precarious state of global gas markets. While strides have been made in enhancing supply security, significant gaps remain. He called for a unified approach among producers and consumers to strengthen global energy systems against future disruptions.
The IEA is taking active steps to foster this collaboration. Its newly established Working Party on Natural Gas and Sustainable Gases Security aims to enhance data sharing and dialogue between stakeholders. Additionally, the upcoming International Summit on the Future of Energy Security, hosted by the UK in April 2025, will address key risks and solutions, paving the way for a more resilient global gas market.
As natural gas markets face another year of tight conditions, the IEA’s report underscores the critical role of international partnerships and forward-looking investments. These efforts are vital not only to balance supply and demand but also to ensure a secure and sustainable energy future.
Touchstone Exploration Inc (LON:TXP) is a Canadian-based, international upstream oil and gas company currently active in the Republic of Trinidad and Tobago. Primera Oil and Gas is the Trinidadian subsidiary of Touchstone.
