Global Gas Market Rebounds with Prospects of Growth Amid Geopolitical and Demand Fluctuations
The global gas market is regaining a positive growth outlook despite ongoing geopolitical uncertainties. The recent release of the Global Gas Report 2026 produced by Rystad Energy the International Gas Union and Italian group Snam highlights evolving trends and future projections. The report emphasises that estimates remain contingent upon the resolution of the conflict at the Strait of Ormuz following a memorandum of understanding signed between the United States and Iran.
Although current uncertainties exist the overall tone of the report is optimistic. Analysts anticipate that once the immediate effects of the crisis subside global demand for gas will resume its long-term growth trajectory. Major projects with a combined liquefaction capacity of 35 million tonnes and regasification capacity of 25 million tonnes are progressing towards final investment decisions indicating sustained confidence in long-term demand growth.
Global gas supply is expected to decrease marginally by 4 billion cubic metres bcm equivalent to 0.1 per cent annually in 2026. This modest decline is largely offset by increased production in the United States and other regions such as Asia and Africa balancing out reductions in the Middle East. The report notes that the contraction in supply is linked to geopolitical tensions and shifting sources particularly the substitution away from Russian gas with a decline of 17 bcm in pipeline flows partially countered by a 9 bcm increase in global liquefied natural gas LNG trade.
Demand trends also reflect regional disparities. Total global gas demand is forecast to fall slightly by 7 bcm or 0.2 per cent driven by reductions in the Middle East Europe Russia and Asia contrasting with increases in North and South America. North America is highlighted as a key growth region with the electric power sector accounting for an additional 11 bcm due to the ongoing reliance on gas-fired plants to meet rising electricity needs.
However the most notable demand growth is projected within the transport sector especially in China where over 51000 GNL-powered trucks were sold in the first quarter of 2026. This segment is expected to grow 7 per cent or 9 bcm overall. The electricity sector is also anticipated to expand by 6 bcm thanks to renewable energy expansion and substitution effects driven by high gas prices.
Europe faces considerable uncertainty with demand expected to decline by 0.8 per cent or 4 bcm. This outlook is predicated on the high elasticity of European gas demand relative to prices which have surged 140 per cent at the TTF index this year while US Henry Hub prices declined by 21 per cent. Increased competition from Asian buyers for American LNG could hinder Europe's ability to meet storage targets for winter influencing demand sensitivity to higher prices.
Ultimately the report underscores the complex interplay of geopolitical tensions regional market dynamics and sector-specific trends affecting the global gas market. While uncertainties remain especially in Europe the overall outlook points towards a gradually recovering market with active investment and shifting consumption patterns driven by both environmental and economic factors.