IEA predicts global gas demand will slip 0.5% in 2026

The International Energy Agency (IEA) said its latest gas market outlook expects worldwide consumption of fossil gas to fall by about 0.5% in 2026, marking the third decline in seven years. The agency attributes the contraction to weaker demand in the power‑generation and industrial sectors, higher liquefied natural gas (LNG) prices and a shift toward coal in parts of Asia.

Regional dynamics vary: the Middle East faces a roughly 4% drop as conflict‑related damage curtails production and high prices cut demand for gas‑intensive industries such as fertiliser manufacturing. Europe’s demand is expected to shrink by more than 2% thanks to rapid renewable‑energy growth and elevated gas prices, while North America sees a modest decline. In contrast, Central and South America could see a 3% rise as gas helps offset reduced hydroelectric output linked to El Niño, and the Eurasian region may grow nearly 3% due to colder temperatures.

The IEA warned that if the Strait of Hormuz is not fully reopened by early Q4 2026, global LNG supply could experience its first annual drop since 2012, keeping markets tighter than anticipated for the next two years.