Following the supply shock of 2022 and 2023, natural gas markets moved towards a gradual rebalancing and returned to structural growth in 2024. Global gas demand reached a new all-time high, with over three-quarters of growth coming from emerging market and developing economies. Preliminary data indicate that gas demand increased by 2.7%, or 115 billion cubic metres (bcm) (equivalent to around 4 EJ) in 2024. This was above the around 2% annual average growth rate from 2010 to 2019 and well above the rate of around 1% between 2019 and 2023, amid the Covid pandemic and global energy crisis. Emerging market and developing economies in Asia accounted for around 40% of additional gas demand in 2024 on the back of continued economic expansion. 

From a sectoral perspective, global gas demand growth was largely supported by industry and electricity generation, which accounted for around 75% of incremental gas demand in 2024. This was bolstered by continued economic expansion in fast-growing markets in Asia, as well as some recovery in Europe’s industrial gas demand, though it remained well below its pre-crisis level.

Gas demand for electricity generation grew by near 2.8% year-on-year, as strong increases in North America, fast-growing Asian markets and Eurasia were partially offset by lower gas-fired power generation in Europe. Extreme weather conditions, particularly heat waves in China, India and the United States,  contributed to higher gas burn in the power sector in 2024. Extreme temperatures alone accounted for around one-fifth of the increase in global natural gas demand. Natural gas demand in the residential and commercial building sectors grew by around 1% in 2024.

Natural gas continued to displace oil and oil products in various sectors, 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 natural gas-powered trucks in China – with record sales in 2024 – 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.

Natural gas demand in emerging market and developing economies in Asia expanded by around 6% in 2024, accounting for nearly 40% of incremental global gas demand. This strong increase was primarily driven by China and India. Both gas markets displayed high growth rates, supported by relatively low LNG prices during the first half of the year and widespread heatwaves in the second and third quarter of 2024. China’s natural gas demand increased by over 7%, although demand growth turned negative in the last two months of the year. In India, natural gas demand increased by 10%, supported by a healthy macroeconomic environment, expanding natural gas grids and higher gas-based power generation needs due to high temperatures.

Natural gas consumption in North America rose by close to 1.8% (or around 20 bcm) in 2024. This growth was primarily supported by gas demand for electricity generation. Natural gas use in the residential and commercial sectors was below its 2023 level, as higher consumption in the fourth quarter could not compensate the demand decline recorded in the first quarter of 2024. Natural gas demand from industry increased marginally compared with 2023. In the United States, natural gas demand increased by an estimated 1.9% in 2024, primarily driven by the power sector, where the gas share rose to an all-time high of 43%.

Natural gas consumption in Latin America rose by 1.6% (or around 2 bcm) in 2024, driven by increased usage for power generation. This demand growth led to a 17% rise in LNG imports, although trends varied between countries. Natural gas demand increased particularly strongly in Brazil and Colombia. Both countries were hit by severe droughts, which limited hydropower availability and increased reliance on gas-fired power generation.

Natural gas consumption in the European Union rose by around 1% in 2024. The bloc’s gas demand for power generation fell by around 5% in 2024 despite the increase of about 1.5% in total electricity demand. The steep decline in gas-fired power output was primarily driven by the strong increase in renewable electricity generation. Natural gas consumption in industry continued to recover in 2024, benefiting from the lower price environment, but it remained nearly 15% below its 2019 level. Natural gas demand in the Middle East grew by an estimated 2%, supported by stronger gas use by the power and industry sectors. In Africa, depressed upstream activity limited natural gas demand growth to below 1%.