The International Energy Agency (IEA) has forecast a 0.5% decline in global natural gas demand for 2026, driven by elevated prices that are curbing consumption among power generators and industrial users.
The agency’s outlook highlights how supply disruptions linked to tensions in the Strait of Hormuz are tightening liquefied natural gas (LNG) supplies globally, forcing buyers to reduce intake as costs rise.
This demand destruction comes at a critical juncture for European markets, where natural gas storage levels have already fallen to their lowest point in 15 years.
The tightening supply picture raises concerns about the region’s ability to weather a severe winter, particularly as geopolitical risks continue to disrupt traditional shipping routes.
While gasoline prices are expected to decline in the near term due to easing supply constraints elsewhere, the natural gas sector faces a more constrained environment.
The IEA’s projection underscores a shift in market dynamics where high prices are no longer just a cost factor but a demand suppressant.