- Rapid growth in liquefied natural gas supply, led by North America, is expected to ease market pressures and support nearly 2 percent global gas demand growth in 2026.
- Global LNG supply rose by almost 7 percent in 2025, with flexible LNG shipments strengthening price links between regional markets.
- Geopolitical tensions and policy shifts, including Europe’s planned phase-out of Russian gas, continue to influence international gas flows and market volatility.
A surge in liquefied natural gas supply is expected to play a pivotal role in rebalancing global gas markets in 2026, according to the International Energy Agency’s latest quarterly Gas Market Report. The increase in supply is anticipated to support stronger demand growth following a slowdown in 2025.
Global gas demand growth slowed to less than one percent last year, down from a relatively strong increase in 2024. Tighter supplies in the first half of 2025 drove higher spot prices, while weaker industrial activity weighed on consumption, particularly across Asia. Supply pressures began easing from mid-2025 as global LNG production accelerated.
Global LNG supply grew by nearly seven percent in 2025, with roughly three quarters of that increase occurring in the second half of the year. North America accounted for the largest share of new LNG capacity, driving double-digit supply growth in the latter half of the year and contributing to falling spot prices in both Europe and Asia. The expansion of destination-flexible LNG further strengthened interconnections between regional markets, resulting in historically high price correlations.
Geopolitical and policy developments continued to influence international gas flows. Notable changes included further market reforms across Asia and the European Union’s decision to phase out Russian gas imports by November 2027. Despite supply gains, natural gas prices remained volatile in January 2026, reflecting adverse weather and geopolitical tensions.
Investment in LNG infrastructure remained robust in 2025, with more than 90 billion cubic metres per year of liquefaction capacity reaching final investment decision, the second highest annual total on record. The United States led the new investment wave, accounting for over 80 billion cubic metres of approved capacity, reinforcing its position as the world’s largest LNG supplier. Record LNG contracting activity highlighted sustained confidence in LNG’s long-term role in global gas markets.
Looking ahead, global LNG supply growth is expected to accelerate to more than seven percent in 2026, its fastest pace since 2019, with North America contributing the majority of a 40 billion cubic metre increase. Stronger supply is projected to drive nearly two percent global gas demand growth, primarily supported by China and other emerging Asian markets.
“The unfolding LNG wave is set to have a central role in shaping global gas markets, likely putting downward pressure on prices and improving liquidity as regional markets become increasingly interconnected,” said IEA Director of Energy Markets and Security Keisuke Sadamori. “Nevertheless, risks remain, including geopolitical tensions and weather conditions. Continued vigilance on energy security is essential, and the IEA is supporting countries worldwide on this critical priority.”
Author: Bryan Groenendaal
