Record demand meets uncertain markets

In 2024, 115 billion cubic meters (bcm) more natural gas have been consumed worldwide than in the previous year. This corresponds to a growth rate of 2.8 percent and thus a significantly higher annual growth rate than in the years 2010 to 2020, for which the International Energy Agency (IEA) recorded an average annual growth rate of 2 percent. This is according to the IEA's latest gas market report.

Asia, primarily China and India, accounted for the largest share of demand at around 40 percent. The increase in Europe was only marginal. In terms of sectors, demand has risen particularly in the industry and energy sectors: in 2024, these sectors accounted for around 45 percent of total gas demand.

Overall, according to the report, natural gas met about 40 percent of global energy needs in 2024, more than any other fuel. Supported by political measures, regulations and market developments, gas is increasingly displacing oil and oil products in a whole range of sectors.

At the same time, gas demand is increasingly dependent on weather conditions such as cold spells and heat waves, the IEA reports. As an example, it cites the record demand for gas in the US during Winter Storm Heather in January 2024 and the 32 percent increase in gas demand in India during the heat waves in the summer of 2024. It also notes that gas plays an important role in ensuring electricity supply even during periods of low solar and wind output in markets increasingly characterized by renewable energies.

This is well below the 8 percent growth rate seen between 2016 and 2020, according to the IEA, which expects growth to increase to around 5 percent in 2025 with the launch and expansion of various LNG projects, particularly in North America

However, the IEA warns that the increasing amount of available LNG will be partially offset by the loss of Russian gas volumes. It expects that the end of gas transit through Ukraine alone (due to the expiration of the corresponding contracts on December 31, 2024, as reported) will result in a 15 bcm reduction in Russian pipeline gas deliveries to Europe in 2025

In combination with the need to refill European gas storage facilities, which were already 15 bcm lower than in the previous year at the beginning of the year, this could lead to an increase in European LNG demand and thus to further pressure on the global gas market. This is particularly true because Moldova and Transnistria, the countries most affected by the end of gas transit, are dependent on the support of their regional and international partners.

In view of tight markets and geopolitical risks, the IEA calls for cooperation: “Responsible producers and consumers,” the report says, “must work together to strengthen the architecture for secure and protected global gas supply.”