Medium-Term Gas Report 2023

The energy crisis triggered by Russia’s invasion of Ukraine marked a turning point for global natural gas markets. Growth in global gas demand is set to slow down significantly over the medium term (2022-2026). This follows a decade of strong expansion in which gas contributed around 40% of the growth in primary energy supply worldwide.

While market tensions eased in the first three quarters of 2023, gas supplies remain relatively tight and prices continue to experience strong volatility, reflecting a fragile balance in global gas markets. High storage levels in the European Union allow for cautious optimism ahead of the 2023-24 heating season. However, a range of risk factors could easily renew market tensions. Northwest Europe will have no access this winter to two sources that used to be the backbone of its gas supply: Russian piped gas and the Groningen field in the Netherlands.

The gas supply shock of 2022 reinforced the structural trends that are weighing on the longer-term prospects for global gas demand. Overall gas consumption across the mature markets of Asia Pacific, Europe and North America peaked in 2021 and is set to decline over the medium term as a result of the rapid deployment of renewables and improved energy efficiency standards. Demand growth is almost entirely concentrated in fast-growing Asian markets and gas-rich countries in Africa and the Middle East. Strong LNG supply at the end of the forecast period is set to ease market fundamentals and unlock price sensitive demand in emerging markets in Asia.

The International Energy Agency’s (IEA) Gas 2023 Medium-Term Market Report provides an outlook on the development of global gas demand and supply until 2026. This year’s report includes a special spotlight on Africa and the potential for gas to contribute to regional economic growth and improved energy access. Beyond the medium-term outlook, the report provides a thorough review of recent market developments ahead of the 2023-2024 winter season in the Northern Hemisphere. As part of the IEA’s Low-Emission Gases Work Programme, this year’s report includes a section on the medium-term outlook for biomethane, low-emissions hydrogen and e-methane. In addition, a special focus is provided on the developments in emerging markets.