IEA: Global gas demand set for slow growth due to high prices

Analysts expect slower economic growth and less switching from coal or oil to gas

Big Zero Report 2022

High prices and supply disruptions are predicted to slow the growth in demand for natural gas.

That’s according to the latest Gas Market Report by the International Energy Agency (IEA), which predicts that global natural gas consumption will contract slightly this year and grow slowly over the following three years.

The report suggests record high gas prices are depressing demand and causing some gas users to switch to coal and oil, while recent reductions in Russian gas flows to Europe are raising alarms about supplies ahead of winter.

The IEA said the current energy environment is damaging natural gas’ reputation as a reliable and affordable energy source, casting doubts about its role in the energy transition.

The authors of the report estimate that global gas demand will rise by a total of 140 billion cubic metres (bcm) between 2021 and 2025, less than half the amount forecast previously and smaller than the 170 bcm increase seen in 2021 alone.

The downward revision in gas demand growth in the coming years is mostly the result of weaker economic activity and less switching from coal or oil to gas, according to the report.

IEA Director of Energy Markets and Security Keisuke Sadamori said: “Russia’s unprovoked war in Ukraine is seriously disrupting gas markets that were already showing signs of tightness.

“We are now seeing inevitable price spikes as countries around the world compete for LNG shipments, but the most sustainable response to today’s global energy crisis is stronger efforts and policies to use energy more efficiently and to accelerate clean energy transitions.”

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