IEA revises down global gas consumption forecast

Consumption is set to rise by 140bcm between 2022 and 2025.

Global natural gas consumption is expected to contract slightly in the next three years to 2025 as prices surge and fuel supply disruption fears remain due to the war between Russia and Ukraine, according to the International Energy Agency (IEA).

In a report, the IEA said global natural gas consumption is seen to grow at an average annual rate of 0.8% from 2022 to 2025 to reach 4,240 billion cubic metres (bcm), a 3.4% increase or almost 140bcm compared with 2021.

This is a downward revision of the demand from IEA’s forecast last year of a compound average growth rate of 1.7% or close to 210bcm for 2021 to 2024. This is against the around 75bcm for the same period in this year’s report.

In 2022 alone, the IEA said consumption will be slightly negative, declining by 0.5%, before increasing in the coming years to reach 1.5% in 2025.

“The current high price and tight supply environment that built up in the second half of 2021, and further intensified after Russia’s invasion of Ukraine in February 2022, is putting natural gas demand under strong pressure,” the report read.

The downward revision in the demand growth is mainly due to weaker economic activity and less switching from coal or oil to gas, the IEA said.

READ MORE: Nuclear restart calls rise in Japan amidst surge in oil, gas prices

It added that speedy deployment of renewable energy and more efficient use of energy would ease pressures on energy prices and support price-sensitive emerging markets to access gas supplies that can help swiftly improve air quality and carbon intensity.

“Russia’s unprovoked war in Ukraine is seriously disrupting gas markets that were already showing signs of tightness,” said IEA Director of Energy Markets and Security Keisuke Sadamori.

“We are now seeing inevitable price spikes as countries around the world compete for LNG shipments, but the most sustainable response to today’s global energy crisis is stronger efforts and policies to use energy more efficiently and to accelerate clean energy transitions,” he added.