IEA projects global gas markets to remain tight in 2025 as demand exceeds supply

The International Energy Agency (IEA) says global natural gas markets will remain tight in 2025 as demand exceeds supply.

The agency spoke about the projection in a statement on Tuesday, announcing the release of its latest quarterly ‘Gas Market Report’.

The IEA said global gas demand increased by 2.8 percent or 115 billion cubic metres (bcm) in 2024 — exceeding the 2 percent average growth rate recorded between 2010 and 2020.

The report attributed the growth primarily to rapidly expanding markets in Asia.

“Global natural gas markets are set to remain tight in 2025 as demand continues to rise and supply expands more slowly than before the pandemic and energy crisis, according to the IEA’s latest quarterly Gas Market Report published today,” the statement reads.

“The report, which provides a thorough review of market developments in 2024 and an outlook for 2025, finds that markets moved towards a gradual rebalancing last year after the supply shock that followed Russia’s full-scale invasion of Ukraine in February 2022.

“Still, the global gas balance has remained fragile, highlighting the need for greater international cooperation to enhance gas supply security.

“Driven by fast-growing markets in Asia, global gas demand rose by 2.8%, or 115 billion cubic metres (bcm), in 2024 – well above the 2% average growth rate between 2010 and 2020.

“At the same time, below-average growth in liquefied natural gas (LNG) output kept supply tight, while extreme weather events added to market strains.”

The IEA said similar dynamics are expected to persist in 2025 before the arrival of a wave of new LNG export capacity — led by the United States and Qatar — that will take effect in the latter half of the decade.

The agency also said geopolitical tensions continue to contribute to price volatility in gas markets.

While the halt of Russian gas transit through Ukraine on January 1, 2025, has not yet posed an immediate threat to the European Union (EU) energy security, the IEA warned that it could increase Europe’s LNG import needs and further tighten global market fundamentals.

The report also highlighted Moldova’s heightened vulnerability compared to the EU, stressing the importance of close coordination with regional and international partners to secure energy supplies through the winter.

The IEA said due to tighter market fundamentals, global gas demand growth is forecast to slow to below 2 percent in 2025.

The agency added that Asia is expected to remain the key driver, accounting for more than half of the projected increase in demand.

‘GREATER EFFORTS NEEDED FROM PRODUCERS, CONSUMERS TO SECURE GAS SUPPLIES’

Keisuke Sadamori, IEA’s director of energy markets and security, stressed the importance of greater collaboration between producers and consumers to strengthen global gas supply security, calling for collective efforts to reinforce the energy infrastructure.

“Gas market fundamentals have improved over the past year, but for now, we are still seeing significant tightness due to rising demand and muted growth in LNG capacity. Heightened geopolitical uncertainty adds to the risks,” Sadamori said.

“While international cooperation on gas supply security has expanded since the recent energy crisis began, greater efforts are needed from responsible producers and consumers, who should strengthen their collective efforts to reinforce the architecture for safe and secure global gas supplies.”

As part of its ongoing efforts to enhance gas supply security, the IEA said it recently established a permanent working party on natural gas and sustainable gases security (GWP) under its standing group on emergency questions.

The initiative, the report added, aims to facilitate data sharing and promote dialogue between gas-producers and consumers.