2025 was a transitional year for natural gas markets. While supply fundamentals remained tight in the first half of the year, strong LNG production growth gradually eased market conditions starting from July. Following a relatively strong increase in 2024, global gas demand growth slowed markedly in 2025 due to a combination of weaker industrial activity and relatively high spot LNG prices in the first half of the year. Market opening reforms continued to gather pace in Asia while the European Union reached a historic decision to phase out Russian natural gas imports by November 2027 at the latest.

Global LNG supply growth is set to accelerate further in 2026 to its fastest pace since 2019. This is expected to foster stronger global gas demand growth, primarily driven by China and emerging Asian markets.

Global LNG production increased by almost 7% (or 38 bcm) in 2025, with around three-quarters of the growth concentrated in the second half of the year. The Plaquemines LNG plant in Louisiana alone accounted for over 60% of the increase in LNG supply through the year and played a key role in the easing of market conditions.

Supply remained relatively tight in the first half of 2025. While global LNG supply increased by 4% (or 10 bcm) year-on-year (y‑o‑y) in the first half of 2025, this was partially offset by lower Russian and Norwegian piped gas deliveries to Europe. In addition, stronger storage injections in the European Union contributed to tighter markets. This kept European and Asian benchmark prices 30% and 40%, respectively, above their levels in the same period a year earlier.

Global LNG supply growth accelerated to 10% (or 28 bcm) y‑o‑y in the second half of 2025, which gradually eased market conditions starting from July. TTF and Asian spot LNG prices fell 14% and 17% respectively in H2 2025 compared with the same period in 2024. The correlation between European and Asian benchmark prices rose to a new all-time high of 0.955 in 2025. This reflects the increasingly interconnected nature of regional markets amid the growing share of destination-flexible LNG supplies.

Following a relatively strong increase in 2024, natural gas demand growth slowed significantly in 2025. Preliminary data indicate that global natural gas consumption increased by less than 1% in 2025. In contrast with previous years, this growth was largely driven by Europe and North America while natural gas demand remained subdued in Asia and declined in Eurasia.

In OECD Europe, natural gas demand grew by 3%, partly supported by stronger gas burn in the power sector amid lower wind and hydro power output. In North America, natural gas consumption increased by an estimated 1%, primarily driven by colder winter temperatures. Asia’s natural gas demand in 2025 slowed to its weakest pace since 2022 and remained close to its 2024 levels. In China, subdued gas demand combined with a continued increase in domestic gas production and higher piped gas deliveries from Russia, led to a steep decline in LNG imports, which dropped by 14% compared with 2024. In Eurasia, natural gas demand declined by around 2% amid mild winter weather conditions in Russia. Combined demand in Africa and the Middle East grew by an estimated 2.5%, partly driven by oil-to-gas switching dynamics in the power sector.

Despite macroeconomic uncertainty, final investment decisions (FIDs) in LNG liquefaction plants remained robust in 2025. Over 90 bcm per year of LNG liquefaction capacity has been given the go-ahead, making 2025 the second strongest year for LNG FIDs, after 2019.

The United States is leading the new investment cycle. More than 80 bcm per year of LNG liquefaction capacity reached final investment decisions in the United States in 2025 – a new all-time high for the US LNG industry. The LNG projects include Louisiana LNG, Corpus Christi Train 8&9, CP2 phase 1, Rio Grande LNG Train 4 and Port Arthur phase 2. This new wave of projects is expected to further solidify the United States’ position as the world’s largest LNG supplier. The United States’ market share in the global LNG market is expected to increase from around 25% in 2025 to around 33% by the end of the decade.

Strong LNG project development was accompanied by an increase in LNG contracting activity. More than 130 bcm per year of LNG contracts were signed in 2025 – representing the largest volume contracted in the past decade. The United States alone accounted for around half of the total contracted volumes in 2025. LNG volumes contracted by European buyers from post-FID projects more than doubled compared with 2024, reaching nearly 25 bcm in 2025.

Natural gas trading volumes and hub liquidity reached new all-time highs across all key markets in 2025. In the United States, gas volumes traded on Henry Hub rose by 8%, while in the European Union and the United Kingdom gas trade increased by an estimated 17% in 2025. In Northeast Asia, trading in key gas derivatives rose by 35% despite a decline in China’s spot LNG procurements.

This continued growth is supported by a number of factors, including the rising short-term variability in gas-to-power demand and the growing interconnectivity of regional gas markets. These developments necessitate more sophisticated hedging strategies and more active trading along the forward curve.

In Asia, natural gas market reforms continued to gather pace. In China, the National Development and Reform Commission introduced new measures to foster effective third-party access to the gas transmission system. India introduced a simplified unified gas transport tariff with the aim to reduce variations in transmission pipeline utilisation. Malaysia launched a Natural Gas Roadmap that aims to expand third-party access to the country’s gas infrastructure. Singapore established a new government-owned entity to centralise the procurement and supply of natural gas for the country’s power generators.

Russia’s full-scale invasion of Ukraine in 2022 disrupted its decade-long energy ties with the European market. Russian piped gas deliveries to the European Union fell by 90% between 2021 and 2025. In December 2025, the European Union reached a historic agreement to fully phase out Russian gas by November 2027 at the latest – ending over five decades of gas dependence. Overall, the EU measures are expected to reduce Russia’s piped and LNG deliveries to the European Union by 33 bcm between 2025 and 2028. This could create additional market space for non-Russian LNG suppliers to the European Union.

Global LNG supply growth is set to accelerate further in 2026 to its fastest pace since 2019. In our forecast, global LNG production increases by more than 7% (or over 40 bcm) in 2026. North America is again set to drive this growth, with the United States, Canada and Mexico accounting for over 85% of the increase in global LNG supply in 2026.

Easing supply fundamentals are expected to foster stronger global gas demand growth, driven primarily by China and emerging Asian markets. Natural gas demand in the Asia Pacific region is expected to increase by 4% in 2026, accounting for around half of global gas demand growth. Natural gas demand is forecast to remain broadly flat in North America, and it is expected to decline by 1% in Central and South America amid improving hydropower generation. In Europe, the continued expansion of renewables is expected to reduce gas demand by 2%. In Eurasia, gas consumption is forecast to increase by 3.5% assuming a return to average weather conditions. Gas demand in Africa and the Middle East combined is expected to increase by 3.5% amid higher gas use in industry and the power sector.