IEA: Natural Gas Market Report for the First Quarter of 2025

The IEA released its "Gas Market Report for the First Quarter of 2025". Global gas demand reached a record high in 2024, and the balance remains fragile. After the supply shock in 2022/23, the gas market gradually moved towards rebalancing and resumed structural growth last year. Global gas demand reached a record high in 2024 and is expected to expand further in 2025, mainly supported by some fast-growing markets in Asia.

Asia Pacific and industrial gas use are the main drivers of increased demand

Preliminary data show that natural gas consumption in 2024 increased by 2.8% year-on-year, or 115 billion cubic meters (BCM), higher than the average growth rate of 2% between 2010 and 2020. Preliminary estimates suggest that natural gas meets around 40% of the growth in global energy demand in 2024, a higher share than any other fuel. This relatively strong growth is mainly due to the Asia-Pacific region, which accounts for nearly 45% of the incremental demand for natural gas in 2024 on the back of continued economic expansion. Industrial natural gas use and the energy sector's own needs are the main drivers behind the global trend, meeting nearly 45% of demand growth. European industrial natural gas demand has recovered slightly, but it remains well below pre-crisis levels.

Extreme weather events highlight the critical role of gas supply flexibility in ensuring heat and power security

Gas demand is becoming more sensitive to changing weather patterns, including cold snaps and heat waves. Climate change is leading to more extreme weather events, and in markets with a growing share of variable renewable energy, gas generation plays an increasingly important role in ensuring security of power supply when wind and/or solar generation is insufficient.

Tight natural gas supply fundamentals are expected to persist through 2025, weighing on global demand growth

Global LNG supply grows by 2.5% (or 13 bcm) in 2024, well below the 8% average growth rate from 2016 to 2020. Project delays, coupled with feed gas supply issues for some traditional producers, have weighed on LNG production growth. This is expected to accelerate to 5%, or just over 25 bcm, in 2025 as several large LNG projects start up and develop, particularly in North America.

Low-emission gases continue to benefit from broad policy support

Policy and market developments can play an important role in decarbonizing the natural gas supply chain and the wider energy system. Global biomethane production will increase by 15% to more than 10 billion cubic meters in 2024, with the largest increases in Europe and North America.

International cooperation on natural gas and LNG supply security is strengthening

As gas market conditions tighten and geopolitical tensions persist, the International Energy Agency has called for greater international cooperation to boost gas supply security.

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