The International Energy Agency (IEA) reports that global gas demand is expected to grow significantly in 2024, marking a 2.5% increase, driven by colder winter temperatures and a decrease in gas prices. Despite this positive outlook, the industry faces challenges related to geopolitical tensions and supply constraints, which could lead to renewed market volatility.（picture source：IEA）
Demand and Supply Dynamics
The IEA’s latest Gas Market Report highlights that the demand for natural gas is rebounding due to expected colder weather conditions in 2024, following an unusually mild winter in 2023. This has increased the need for space heating in residential and commercial sectors, particularly in the Northern Hemisphere.
While gas prices have dropped sharply from the record highs of 2022, they remain above historical averages, which supports demand recovery, especially in price-sensitive industrial sectors. The report indicates that China, North America, and gas-rich countries in Africa and the Middle East are leading the resurgence in gas consumption. In 2023, China saw a 7% increase in natural gas demand, reaffirming its position as the world’s largest LNG importer. Conversely, Europe’s gas consumption fell by 7%, reaching its lowest level since 1995, due to the expansion of renewable energy sources and improved nuclear power availability.
On the supply side, global LNG production has not met expectations, resulting in continued tightness in the gas market. The United States has emerged as the largest LNG exporter, contributing to 80% of the additional LNG supply in 2023. However, delays in new liquefaction projects and challenges in securing feedgas for existing plants are likely to limit supply growth in 2024. This constrained supply is expected to restrict demand growth in Europe and mature markets in Asia.
Industry and Policy Implications
The IEA underscores the importance of international cooperation in addressing these supply challenges. Enhancing flexibility in gas and LNG value chains and implementing emissions reduction initiatives are critical for maintaining market stability. The report also focuses on the need for robust policies to support the adoption of low-emissions hydrogen, biomethane, and e-methane as part of the global energy transition.
The ongoing geopolitical tensions and rising shipping constraints further complicate the supply outlook. The report calls for strengthened international partnerships to mitigate these risks and ensure a stable gas supply. The emphasis on emissions reduction aligns with global climate goals, as the industry seeks to balance growing demand with the need for sustainability.
Conclusion
As the gas industry navigates these complex dynamics, the IEA’s report provides a comprehensive overview of market developments and forecasts. The anticipated growth in demand, coupled with supply-side challenges, underscores the critical role of strategic planning and international cooperation in ensuring the stability and sustainability of the global gas market in 2024 and beyond.
