Global natural gas markets are set to remain tight this year, with rising demand outpacing the slower growth in supply compared to pre-pandemic and pre-energy crisis levels, according to a new report by the International Energy Agency (IEA) on Tuesday.
The IEA’s latest quarterly Gas Market Report provides a review of market developments in 2024 and an outlook for 2025.
The report finds that markets moved towards a gradual rebalancing in 2024 after the supply shock that followed Russia’s invasion of Ukraine in 2022, the Paris-based energy watchdog said in a statement.
“Still, the global gas balance has remained fragile, highlighting the need for greater international cooperation to enhance gas supply security,” it added.
Driven by rapidly expanding Asian markets, global gas demand rose by 2.8%, or 115 billion cubic meters (bcm) in 2024, significantly surpassing the 2% average annual growth rate observed 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 report added.
Similar trends will continue in 2025 ahead of a substantial increase in LNG export capacity, led by the US and Qatar, slated to come online in the latter half of the decade, the report noted.
-'Vulnerability of Moldova is significantly greater than that of the EU'
The report highlighted that while the cessation of Russian piped gas transit through Ukraine on Jan. 1, 2025, does not pose an immediate threat to the European Union's supply security, it could drive up European LNG import demands and intensify global market pressures in 2025.
“The vulnerability of Moldova is significantly greater than that of the EU, requiring close coordination between Moldova and its regional and international partners to ensure energy supply security through the winter,” it warned.
Amid tighter market conditions, global gas demand growth is projected to decelerate to below 2% this year, according to the report. “As in 2024, the growth is set to be largely underpinned by Asian markets, with the region expected to account for over half of the rise in global gas demand.”
Commenting on the report, Keisuke Sadamori, the IEA’s Director of Energy Markets and Security, noted that despite improved fundamentals, gas markets remain tight due to rising demand, limited LNG growth, and heightened geopolitical risks.
“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,” Sadamori added.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr