Strait of Hormuz disruption threatens first annual demand decline since 2022, even as LNG trade and prices show new resilience
Global natural gas demand climbed to an all-time high in 2025, but a supply shock in the Middle East is now poised to end that growth streak, according to the Global Gas Report 2026, published jointly by the International Gas Union, Snam and Rystad Energy.
Demand reached 4,202 billion cubic meters (bcm) last year, up 69 bcm, or 1.7%, from 2024, the report found. Supply also hit a record 4,147 bcm, and global LNG trade rose to a landed total of 580 bcm — a 6.3% jump that the report’s authors called record growth.
That momentum is now being tested. The Strait of Hormuz crisis, which erupted in late February 2026, has knocked out roughly 20% of global LNG supply, or about 3% of total natural gas supply, by disrupting flows through one of the world’s most critical energy chokepoints.
First Demand Decline Since 2022
Rystad Energy now projects global natural gas demand will fall by 7 bcm in 2026, marking the first annual drop since 2022. Middle East consumption is expected to bear the brunt of the pullback, down 17 bcm, followed by declines in Europe, Russia and Asia. North America and South America are forecast to be the only regions posting demand growth this year.
Qatar has absorbed the deepest supply losses. The country’s LNG exports fell 91% year-over-year in May 2026, and operator QatarEnergy declared force majeure on supplies through mid-June after missile strikes damaged liquefaction infrastructure at Ras Laffan. QatarEnergy also confirmed in late March that its North Field expansion — originally due online by the end of 2026 — has been suspended, with potential delays of up to a year.
Prices Rise, But Stay Below 2022 Extremes
The crisis has driven European and Asian benchmark gas prices to their highest monthly averages since the 2022 energy crisis, though well short of that period’s extremes. The Dutch TTF benchmark, Europe’s main gas price marker, averaged $20.80 per million British thermal units (MMBtu) in March 2026, compared with peaks above $70/MMBtu during the 2022 Russia-Ukraine crisis.
Report authors say that gap reflects a fundamentally more resilient market than the one that faced the 2022 shock. Since then, the industry has invested heavily in diversified supply, expanded liquefaction and regasification capacity, and built out storage — investments that gave buyers options when Gulf flows were curtailed.
“The gas industry’s response to these unprecedented events has demonstrated great flexibility and resilience,” Andrea Stegher, president of the International Gas Union, wrote in the report’s foreword.
US Cements Position as Top Exporter
Even before the crisis, the global trade map was shifting. The United States overtook Russia in 2025 to become the world’s largest net natural gas exporter, at 167 bcm, as US LNG filled the gap left by the January 2025 expiration of the Ukraine gas transit agreement. US LNG now accounts for more than half of Europe’s LNG imports.
China remained the world’s largest LNG importer in 2025 despite a 10% drop in purchases, driven largely by a collapse in US-to-China trade amid tariff tensions. Japan and South Korea followed as the second- and third-largest importers.
Long-Term Outlook Still Points to Growth
Despite the near-term disruption, the report projects global gas demand could return to its structural growth path once the Strait of Hormuz situation stabilizes. Rystad Energy estimates demand could reach 4,516 to 4,575 bcm by 2030 if recent trends continue — outpacing sanctioned supply by as much as 905 bcm and underscoring the need for continued investment in liquefaction, storage and pipeline infrastructure.
The report also points to accelerating momentum in low-emission gas technologies. Carbon capture, utilization and storage (CCUS) capacity reached a record 74 million tonnes per annum (Mtpa) in 2025, biomethane production capacity rose to 16.5 bcm, and clean hydrogen offtake agreements climbed 34% year-over-year to 1.7 Mtpa.
Authors of the report say the industry’s next challenge will be sustaining that investment pace amid heightened geopolitical volatility, rising power demand from AI data centers, and more frequent extreme weather events — all factors reshaping how much natural gas the world will need in the years ahead.
Source: Global Gas Report 2026, jointly published by the International Gas Union, Snam and Rystad Energy.
