Global natural gas demand reached a record 4,202 billion cubic metres (bcm) in 2025, rising 69 bcm or 1.7 per cent from the previous year, but is projected to decline by 7 bcm in 2026 as the Strait of Hormuz crisis disrupts supplies and raises prices for buyers in Asia and Africa, according to the Global Gas Report 2026.
Global supply also hit a record 4,147 bcm in 2025, while liquefied natural gas (LNG) net imports reached 580 bcm. The report, by the International Gas Union (IGU), Snam and Rystad Energy, said the 2026 decline will be the first in global gas demand since 2022.
The Strait of Hormuz crisis has constrained around 20 per cent of global LNG supply, equivalent to about 3 per cent of total global natural gas supply in 2025. The disruption is expected to push global gas supply down by 4 bcm in 2026, although rising production in the United States, China and other regions is expected to offset part of the loss.
The impact has been particularly severe for price sensitive markets in emerging Asia and Africa, where higher LNG prices have prompted buyers to cut consumption, switch fuels and draw on storage.
Global LNG trade fell 4 per cent year on year between January and June 2026, with more than 80 per cent of the import shortfall concentrated in Asia. In contrast, North American gas demand is expected to increase by 10 bcm, moderating the projected global demand decline to 7 bcm.
The report estimates that global demand will fall by 17 bcm in West Asia, 4 bcm in Europe, 2 bcm each in Russia and Asia, while North America and South America will add 10 bcm and 8 bcm, respectively.
The disruption followed a year of strong growth. Asia added 25 bcm of gas demand in 2025, while Europe added 10 bcm, driven by colder weather and lower wind power generation. The residential and commercial sector recorded the largest absolute increase, adding 32 bcm, while the power sector remained the largest gas consuming sector, accounting for 34 per cent of global demand.
North America led the increase in production, with stronger prices encouraging drilling in the Permian, Haynesville and Appalachian basins. The United States also overtook Russia as the world’s largest net natural gas exporter after the expiry of the Ukraine gas transit agreement accelerated Europe’s shift away from Russian pipeline gas. US LNG accounted for more than half of European LNG imports.
Gas prices remained broadly stable in 2025 before the Strait of Hormuz crisis pushed them sharply higher in the first half of 2026.
The Dutch Title Transfer Facility, or TTF, averaged $12.2 per million British thermal units (MMBtu) in 2025, while LNG prices in Northeast Asia averaged $11.9 per MMBtu and Henry Hub averaged $3.6 per MMBtu. In March 2026, TTF reached $20 per MMBtu, or €60 per megawatt hour, its highest monthly average since 2022, but remained well below the levels seen during the Russia Ukraine energy crisis.
The report attributes the relatively contained price response to greater supply diversification, additional liquefaction capacity and storage availability.
The report also points to rising cooling demand and data centre expansion as structural forces reshaping future energy consumption. Global data centre electricity consumption grew by around 30.9 per cent annually between 2020 and 2025 to reach 557 terawatt hours (TWh) and could rise to 2,904 TWh by 2030 if the full project pipeline materialises.
In India, peak electricity demand reached a record 271 gigawatts (GW) in May 2026 amid severe heatwaves. During April and May, natural gas-based power plants increased their gas purchases on the Indian Gas Exchange by around 340 per cent year on year to 124.3 million cubic metres, according to the report.
While solar generation helped meet daytime demand, gas-based plants provided flexible supply during the evening and night when solar output was unavailable, the report said. India’s average monthly LNG imports between March and June were 5.4 per cent above the annual monthly average in 2023 and 2.5 per cent higher in 2024.
The report also noted that every 1°C increase in outdoor temperature in India was associated with more than 7 GW of additional peak demand in 2024, compared with around 4 GW in 2019.
Alongside conventional gas, low emission gas technologies continued to expand in 2025. A record 19.5 million tonnes per annum (Mtpa) of carbon dioxide capture capacity reached final investment decision, while 8.1 Mtpa started operations, taking global operational capacity to 74 Mtpa.
Biomethane operational capacity reached 16.5 bcm in 2025, while global clean hydrogen capacity rose to 1.2 Mtpa by early 2026. Binding hydrogen offtake agreements signed in 2025 increased by around 34 per cent year on year to 1.7 Mtpa.
However, the report said the gap between project costs and what customers are willing to pay remains the key barrier to scaling these technologies. It identified demand supporting policies, long term offtake agreements, Carbon Contracts for Difference and lower technology costs as among the measures needed to improve project economics.
The report expects gas demand to return to its underlying growth trajectory once the Strait of Hormuz disruption eases. It said 67 million tonnes of liquefaction capacity and 51 million tonnes of regasification capacity reached final investment decision in 2025, followed by another 35 million tonnes and 25 million tonnes, respectively, in the first half of 2026.