Over the course of 2022 and 2023, the largest natural gas supply shock in history unfolded, developing from seemingly regional dynamics into a global shockwave in gas and wider energy markets. The crisis has yet to be entirely resolved in the 3 years that have since passed. However, the post-crisis gas market paradigm has started to emerge, making it possible to draw lessons from the most acute phase of the crisis that can be transposed from one region or market to another, or that can be achieved through collective action across the wider gas market. While gas dependency can be reduced by accelerating the deployment of renewable power generation technologies and electrification of end-uses, the focus of this report is on gas markets. In conjunction with countries’ long-term energy and decarbonisation objectives, these lessons will be key in enhancing preparedness for future gas market crises.

The first lesson is that the global gas market has entered a structurally (and geopolitically) more fragile environment following the 2022-2023 supply shock. Despite fast reorganisation of available liquefied natural gas (LNG) volumes in response to the loss of Russian pipeline flows in Europe, LNG trade flexibility did not equate to compensating lost volumes in globally traded gas. With less natural gas swing production capacity available to the market – namely as a result of the sharp drop in Russian supply to Europe – developing alternative flexibility and reserve options in the global gas and LNG market will be essential in better preparing for future gas supply shocks.

Second, although the concurrent needs of the world’s two largest LNG import regions – Asia and Europe – led to zero-sum competition for LNG volumes at the peak of the 2022-2023 crisis, fostering co-operation and co-ordination among like-minded importers and responsible suppliers can help ease the detrimental effects of competitive pressure from future shocks. Working towards the relevant co-ordination mechanisms in a time of benign market conditions is essential in reducing uncertainty and enhancing predictability around the balancing of the global gas market in crisis periods.

Third, the crisis highlighted the role of infrastructure redundancy in managing supply disruptions effectively. Infrastructure remains the backbone of liquid and flexible energy markets, and in the post-crisis market environment energy infrastructure needs are likely to be greater to support security of supply in a more fragile gas market context. Evaluating the associated benefits and costs will be key in mobilising the right energy infrastructure investments and capitalising on their redundancy value in strengthening preparedness for future market shocks.

Fourth, the supply shock showed that taking a strategic approach to building supply portfolios, including the use of term contracts, can mitigate price and supply risks during emergencies. The composition of market players’ LNG supply portfolios played a central role in shaping the risks and burdens borne by countries, their economies and their citizens. Elements such as expectations of future demand, the purchasing power of a client base or varying degrees of appetite for risk mean that contracting strategies vary across entities. The contrast in the challenges faced by different countries during the crisis highlights how the structure of supply portfolios – notably with respect to contract length and pricing terms – remains a determining factor in managing supply shocks and market movements.

Finally, the 2022-2023 crisis showed the significance of energy affordability in ensuring security of supply. Global gas prices skyrocketed to record-breaking highs during the crisis, effectively rendering supply inaccessible to some consumers and placing significant fiscal and economic strain on countries around the globe. Sharing best practices and increasing transparency around the dual implementation of affordability measures and demand response tools will enhance the global market’s collective capacity to tackle future supply shocks and better prevent the detrimental effects of demand destruction.