Global natural gas demand will fall 0.5% in 2026 as Middle East conflict, tight supply and high prices curb consumption, the IEA forecasts. LNG shipments from Qatar and the UAE dropped almost 80% between March and June, though output elsewhere is keeping full-year supply broadly flat.
The International Energy Agency expects global natural gas demand to fall 0.5% in 2026, as tighter supply and elevated prices press on consumption in key markets. That contraction would mark the third annual decline in global gas demand in seven years.
Hormuz disruption reshapes the market
The pressure traces back to the Middle East conflict, which continues to reshape gas flows through the Strait of Hormuz. Before the war, the waterway carried around 20% of global LNG supply.
Carrier traffic has increased since the US and Iran reached an interim agreement in mid-June to end hostilities and reopen the route. But transit levels remain well below pre-conflict volumes, and uncertainty still surrounds future trade flows. Prices in Asia and Europe have eased from their March highs, yet they stay well above 2025 levels.
Where demand is falling
Early data suggested demand declined year on year in the first half of 2026, driven mainly by weaker consumption in the Middle East, where tighter supply and damage to gas-intensive industries cut usage. Demand also softened across Asia, as higher prices and policy measures pushed buyers toward reduced consumption and fuel switching, particularly to coal in the power sector.
The supply side moved even more sharply. LNG supply from Qatar and the UAE fell almost 80% between March and June against the same period in 2025. Even so, full-year global LNG supply is expected to hold broadly unchanged from 2025 as producers elsewhere raise output, with new projects in North America, Africa and Australia offsetting the Middle East losses.
The risk beyond this year
The IEA warned that a delay in fully reopening the Strait of Hormuz past the start of the fourth quarter could hand global LNG supply its first annual decline since 2012. Damage to infrastructure, including Qatar’s Ras Laffan facility, is expected to delay the country’s planned capacity expansion, with effects concentrated mainly in 2026 and 2027.
The strain reaches past energy. Because natural gas feeds fertiliser production, the IEA said the disruption to fertiliser supply chains could carry implications for food security in vulnerable regions. The report leaves natural gas markets tighter than previously expected over the next two years.
Source: Oil & Gas Middle East
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