Natural gas market will remain tight in 2023: IEA

Its consumption will decline by 0.8% this year.

Global gas consumption is expected to dip only by 0.8% in 2022 due to the record 10% contraction in Europe and the unchanged demand in the Asia Pacific, according to a report by the International Energy Agency (IEA).

The IEA said the global demand is projected to increase by only 0.4% in 2023 but it is “still subject to a high level of uncertainty, particularly in terms of Russia’s future actions and the economic impacts of sustained high energy prices.

It said the prices of European natural gas and Asia spot liquified natural gas hit record highs in the third quarter, resulting in an incentivised shift to other fuels such as coal and oil for power generation, and reduced gas demand.

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“Russia’s invasion of Ukraine and sharp reductions in natural gas supplies to Europe are causing significant harm to consumers, businesses and entire economies – not just in Europe but also in emerging and developing economies,” said Keisuke Sadamori, IEA’s director of Energy Markets and Security. 

“The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier. But all the signs point to markets remaining very tight well into 2023,” Sadamori added.

Russia “largely cut off” gas supplies to Europe following the sanctions imposed against it due to its invasion of Ukraine, the agency said.