The International Energy Agency's (IEA) latest Q1 2026 International Natural Gas Market Report indicates that following relatively robust growth in 2024, global natural gas demand growth decelerated significantly in 2025. This slowdown resulted from the dual impact of sluggish industrial activity in the first half of the year and persistently high spot liquefied natural gas (LNG) prices. The report projects a positive outlook for the 2026 natural gas market, anticipating that the expanding wave of liquefied natural gas will drive robust global demand growth—potentially reaching the fastest pace since 2019—with China and emerging Asian markets serving as primary drivers.

The report indicates that supply conditions remained relatively tight in the first half of 2025. Although global LNG supply grew by 4% year-on-year (equivalent to approximately 10 billion cubic meters) during this period, this increase was partially offset by reduced pipeline gas flows from Russia and Norway to Europe. Furthermore, the European Union's intensified efforts to replenish storage facilities further tightened the market, leading to year-on-year increases of 30% and 40% in European and Asian benchmark gas prices, respectively. However, in the second half of 2025, global LNG supply growth accelerated to 10%, reaching approximately 28 billion cubic meters, shifting market fundamentals toward greater supply-demand balance. Global LNG production increased by nearly 7% in 2025, totaling about 38 billion cubic meters, with roughly three-quarters of this growth concentrated in the latter half of the year. The Plaquemines LNG plant in Louisiana, USA, contributed over 60% of this supply increase, playing a pivotal role in easing market tensions. Compared to the same period in 2024, natural gas futures prices at the Dutch TTF (Transaction Transfer Facility) and Asian spot LNG prices declined by 14% and 17%, respectively, in the second half of 2025.

The report analysis indicates that global natural gas demand growth was constrained by macroeconomic uncertainties and supply tightness in the first half of 2025. The growth rate of natural gas demand slowed significantly in 2025, with global consumption increasing by less than 1%. Growth was primarily driven by Europe and North America, while Asian demand remained sluggish and Eurasian demand declined. In Europe, natural gas demand grew by 3%, partly due to increased consumption in the power sector amid reduced wind and hydroelectric output. Driven primarily by colder-than-average winter temperatures, North American natural gas consumption increased by approximately 1%. In contrast, Asia's natural gas demand growth in 2025 fell to its lowest level since 2022. China's LNG imports declined by 14% year-on-year. Eurasia saw natural gas demand fall by about 2% due to Russia's warm winter. Total demand in Africa and the Middle East is projected to grow by 2.5%, driven by oil and gas substitution effects in the power sector.

The report indicates that globally approved LNG capacity for 2025 exceeds 90 billion cubic meters annually, with approved investment levels second only to those in 2019. The United States is leading a new cycle of LNG capacity investment. In 2025, the United States secured investment decisions for over 80 billion cubic meters per year of LNG capacity, setting a historic high for the U.S. LNG industry. These projects include the Louisiana LNG Project, Corpus Christi LNG Units 8 and 9, Phase 1 of the CP2 Project, Grand River LNG Unit 4, and Phase 2 of the Port Arthur Project. This wave of new projects will solidify the U.S. position as the world's largest LNG supplier. By 2030, the U.S. share of the global LNG market is projected to rise from approximately 25% in 2025 to around 33%.

Global natural gas trading volumes in major markets reached record highs in 2025. Gas trading volume at the Henry Hub in the U.S. grew by 8%, while EU and UK gas trading volume is projected to increase by approximately 17%. Despite a decline in China's spot LNG purchases, key natural gas derivatives trading volume in Northeast Asia still achieved a 35% increase. Correspondingly, the signing of global LNG trading contracts saw a significant rise. Annual LNG contract volumes signed in 2025 exceeded 1.3 trillion cubic meters, setting a decade-high record. The United States alone accounted for approximately 50% of total contracted volumes in 2025, while European buyers' LNG orders nearly doubled compared to 2024, reaching nearly 25 billion cubic meters.

The report indicates that reforms in Asia's natural gas market continue to deepen. In 2025, China introduced new measures to promote effective third-party access to its gas transmission and distribution systems. India implemented a simplified unified gas transportation tariff mechanism to reduce disparities in pipeline utilization rates. Malaysia released its “Natural Gas Development Roadmap,” planning to expand third-party access to its gas infrastructure. Singapore established a new state-owned entity.

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