Following the supply shock of 2022/23, natural gas markets moved towards a gradual rebalancing and returned to structural growth last year. Global gas demand reached a new all-time high in 2024 and is expected to expand further in 2025, primarily supported by some fast-growing markets in Asia. Meanwhile, the global gas market balance remains fragile. Below-average growth in liquefied natural gas (LNG) output has kept supply tight, while extreme weather events have added to market strains. Geopolitical tensions have continued to fuel price volatility. Though the halt of Russian piped gas transit via Ukraine on 1 January 2025 does not pose an imminent supply security risk for the European Union, it could increase LNG import requirements and tighten market fundamentals in 2025. 

Preliminary data indicate that natural gas consumption increased by 2.8%, or 115 billion cubic metres (bcm), year-on-year (y-o-y) in 2024, above the 2% average growth rate between 2010 and 2020. First estimates indicate that natural gas met around 40% of the increase in global energy demand in 2024 – a greater share than any other fuel. This relatively strong growth was mainly due to the Asia Pacific region, which accounted for almost 45% of incremental gas demand in 2024 on the back of continued economic expansion. Gas use for industry and for the energy sector’s own needs were the primary drivers behind global trends and met almost 45% of demand growth. There was a modest recovery in Europe’s industrial gas demand, although it remained well below pre-crisis levels.

Natural gas continues to displace oil and oil products in various sectors. This trend is supported by policies, regulations and market dynamics. In the Middle East, oil-to-gas switching in the power sector continued in 2024. In road transport, the rapid scaling up of LNG-fuelled trucks in China – with record sales in 2024 – has contributed to lower diesel demand there. The use of LNG as a bunkering fuel is also expected to increase amid more stringent emissions regulations for shipping. The displacement of oil and oil products in these sectors is expected to continue over the medium term.

The sensitivity of natural gas demand to changes in weather patterns, including cold snaps and heatwaves, is increasing. Climate change is driving more extreme weather events, while in markets with a growing share of variable renewables, gas-based generation plays an increasingly important backup role in ensuring electricity supply security at times when wind and/or solar output is low.

In the United States, gas demand surged to an all-time high of 3.9 bcm per day during winter storm Heather in January 2024. Gas demand in the residential and commercial sectors rose by 70% between 11 and 16 January as below-average temperatures pushed up space heating requirements. Gas-fired power plants increased their output by more than 40% between 13 and 16 January, accounting for nearly 80% of additional power generation.

In India, powerful heatwaves during the summer of 2024 drove up gas-fired power generation to multi-year highs. Gas demand for power generation in India rose by 32% in the May-July period y-o-y as higher cooling needs increased electricity use. Incremental gas demand was primarily met through increased LNG imports.

In South America, both Brazil and Colombia faced extreme droughts last year, limiting their hydropower output and sharply increasing the call on gas-fired power plants, with most incremental gas demand met via LNG.

In Europe, slow wind speeds in the first half of November 2024 led to a sharp decline in wind power output y-o-y. Gas-fired power plants played a key role in providing backup to the power system by increasing their output by nearly 80% y-o-y. Higher gas demand was primarily met through larger storage withdrawals.

These events highlight the need for a careful assessment of investment in the assets that enable the secure delivery of gas, including gas storage, as well as the development of mechanisms that allow for greater supply flexibility. 

Global LNG supply grew by 2.5% (or 13 bcm) in 2024 – well below its average growth rate of 8% between 2016 and 2020. Project delays, together with feedgas supply issues at certain legacy producers (including in Angola, Egypt, and Trinidad and Tobago), weighed on LNG production growth. However, it is set to accelerate to 5%, or just over 25 bcm, in 2025 amid the expected start and ramping up of several large LNG projects, notably in North America. This includes Phase 1 of the Plaquemines LNG project (which loaded its first LNG cargo in December 2024), the Corpus Christi Stage 3 expansion, and LNG Canada. Africa and Asia are also expected to contribute to LNG supply growth in 2025. Russia’s Arctic LNG 2 project is not considered as a source of firm LNG supply in the current forecast due to sanctions.

Growth in LNG supply is set to be partially offset by lower Russian piped gas deliveries to Europe. This forecast assumes no Russian piped gas deliveries through Ukraine for the remainder of the year. Our assessment indicates this should not pose an immediate supply security risk to EU member states, considering their ample storage capacity, midstream interconnectivity and access to the global LNG market. But the vulnerability of Moldova – which declared a 60-day state of emergency in December ahead of the halt of Russian piped gas deliveries – is significantly greater, requiring close co-operation with its regional and international partners to ensure energy supply security through the winter season. In the region of Transnistria, heat and hot water supply cuts for residential consumers have been in place since 1 January.

The halt of Ukrainian transit for the full year would reduce Russian piped gas supplies to Europe by around 15 bcm in 2025 compared with 2024. Notably, natural gas inventory levels in the European Union were already down 15 bcm year-on-year at the beginning of 2025, potentially increasing demand this summer to replenish storage sites. These factors, taken together, could necessitate higher European LNG imports this year, tightening the global gas balance.

Due to tighter market fundamentals, growth in global gas demand is forecast to slow to below 2% in 2025. As in 2024, growth is set to be largely driven by Asia, which is expected to account for almost 45% of incremental gas demand. 

This edition of the quarterly Gas Market Report provides an overview of the key policy and market developments related to low-emissions gases, which can play an important role in decarbonising gas supply chains and the broader energy system. Global biomethane output increased by an estimated 15% in 2024 to over 10 bcm, with growth led by Europe and North America. Subsidies and support mechanisms for low-emissions hydrogen became more robust in 2024, although project developments and final investment decisions remained relatively modest. 

With tight gas market conditions and geopolitical tensions continuing, the IEA has called for greater international co-operation to enhance gas supply security. Responsible producers and consumers need to work together to reinforce the architecture for safe and secure global gas supplies. A number of new initiatives were launched in 2024 with the aim of improving market transparency, data exchange and co-operation mechanisms on gas and LNG. This included the Global Early Warning Mechanism established by the European Union and Japan.

Building on the IEA’s longstanding work on gas supply security, the IEA established in late 2024 a permanent Working Party on Natural Gas and Sustainable Gases Security (GWP) under the Standing Group on Emergency Questions, which aims to facilitate data and information exchange among its members and to promote dialogue between producers and consumers. In April 2025, the IEA will convene an International Summit on the Future of Energy Security, hosted by the UK government. The Summit will address traditional and emerging risks related to energy security, including for natural gas.