IEA Anticipates Drop in Global Natural Gas Consumption During 2026

The International Energy Agency (IEA) anticipates a 0.5% decrease in global natural gas consumption during the current year. This decline is primarily attributed to rising prices, which have curtailed demand from the power generation and industrial sectors, in addition to reduced supplies. This projected decrease, estimated at approximately 20 billion cubic meters, marks the third annual reduction in the current decade, following those in 2020 and 2022, according to the IEA's third-quarter 2026 gas market report. Demand for gas in Asia recorded a 1% year-on-year decline during the first half of 2026, driven by high prices that pushed consumers towards alternative fuels, particularly coal in the power generation sector. In a related development, the conflict between the United States and Iran caused a sharp drop in liquefied natural gas (LNG) flows through the Strait of Hormuz, a vital waterway through which approximately 20% of global supplies typically pass. While global LNG supply is expected to remain relatively stable for the entire year compared to 2025, thanks to production increases in other regions compensating for Gulf disruptions, the IEA warned that failure to fully reopen the Strait before the fourth quarter could lead to the first annual decrease in global supply since 2012. Furthermore, LNG supplies from Qatar and the UAE sharply declined by about 80% during the March-to-June period compared to the same period in 2025.