Following the gas supply shock of 2022/23, natural gas demand returned to structural growth in 2024 and continued to expand through the 2024/25 heating season1. Growth was primarily concentrated in Europe and North America, with weather conditions, including lower temperatures, leading to stronger gas use in buildings and the power sector. In contrast, gas demand growth slowed in Asia amid higher spot liquefied natural gas (LNG) prices and a milder winter in the People's Republic of China (hereafter “China”).
Tighter market fundamentals put upward pressure on gas prices across all key markets, while geopolitical tensions have also continued to fuel price volatility. Below-average growth in global LNG output together and lower piped gas exports from the Russian Federation (hereafter “Russia”) to the European Union have kept supply tight and increased the call on gas storage and reserve mechanisms.
Global gas demand growth is expected to slow to around 1.5% in 2025 due to a combination of initially tight market conditions and heightened macroeconomic uncertainties. The global gas balance remains fragile in an increasingly complex geopolitical context, and dialogue between producers and consumers is important to ensure secure gas supplies. On 24-25 April 2025, the IEA will convene an international Summit on the Future of Energy Security, in partnership with the UK government. The Summit will address traditional and emerging risks related to energy security, including those affecting natural gas and LNG value chains.
Europe and North America led demand growth through the 2024/25 winter season while Asian markets slowed
Natural gas demand patterns varied significantly across key gas markets, largely driven by weather conditions. Preliminary data indicate that natural gas consumption increased by 1.8%, or just below 35 billion cubic metres (bcm), year-on-year (y-o-y) through the 2024/25 heating season in the selected markets covered in the current market update2. In contrast with previous years, this relatively strong growth was largely driven by Europe and North America.
In Europe, gas consumption increased by nearly 10% y-o-y as lower renewable electricity output supported higher gas burn in the power sector. Periods of low wind power generation highlighted the key role gas-fired power plants can play in ensuring electricity supply security in energy markets increasingly dominated by variable renewables. In North America, a colder winter pushed natural gas consumption to an all-time high, with demand growth largely supported by stronger gas use in buildings. In contrast, gas demand growth slowed significantly in Asia, with China's gas demand declining by around 2% y-o-y in the November 2024-February 2025 period. Milder weather in northern China, together with weaker macroeconomic performance and high LNG spot prices, weighed on gas demand expansion in Asia. In Eurasia, natural gas consumption declined by an estimated 3% y-o-y through the 2024/25 heating season amid an unseasonably mild winter in Russia.
Natural gas storage and reserve mechanisms played a key role in ensuring stable gas supply over the 2024/25 winter
Underground storage facilities and reserve mechanisms provided crucial flexibility to the gas system and ensured stable and secure gas supplies over the 2024/25 heating season.
In Europe, lower piped gas imports from Norway and Russia, together with higher natural gas demand, increased the call on underground storage facilities. In the European Union, net storage withdrawals grew by more than 50% y-o-y, accounting for over 30% of natural gas demand through the November-March period. In the United States, higher gas consumption drove up storage draws by more than 40% compared with a year earlier. Altogether, net storage withdrawals accounted for nearly 15% of natural gas demand in the United States through the November- March period. Japan's Strategic Buffer LNG mechanism provided additional gas supply security for the country. Under the scheme, Japan secured one LNG cargo each month during the winter peak demand period between December 2024 and February 2025.
Supply fundamentals are expected to remain tight in 2025, weighing on global demand growth
Global LNG supply grew by 2% (or 6 bcm) y-o-y through the 2024/25 heating season. This relatively small increase was largely supported by the Plaquemines LNG facility in Louisiana, which started operations in late 2024 and alone accounted for almost half of incremental LNG supply through the winter. LNG supply growth is forecast to accelerate to 5%, or 27 bcm, in 2025 amid the expected starts and ramping up of several large LNG projects. North America is expected to account for about 85% of global incremental LNG supply in 2025. This includes Phase 1 of the Plaquemines LNG project, the Corpus Christi Stage 3 expansion, and LNG Canada. Africa and Asia are also expected to contribute to LNG supply growth in 2025. Russia's Arctic LNG 2 project is not considered as a source of firm LNG supply in the current forecast due to the broader sanctions environment. Growth in LNG supply in 2025 is set to be partially offset by lower Russian piped gas deliveries to Europe. This forecast assumes no Russian piped gas deliveries through Ukraine for the remainder of the year, which would reduce Russian piped gas supplies to the European Union by around 15 bcm in 2025 compared with 2024. Notably, natural gas inventory levels in the European Union closed the heating season 25 bcm below their level a year earlier, potentially increasing demand to replenish storage sites this summer. These factors, taken together, would necessitate higher European LNG imports this year, tightening the global gas balance.
Growth in global gas demand is forecast to slow to around 1.5% in 2025. Asia's natural gas demand is forecast to expand by just over 2%, representing a significant slowdown compared with 2024, when the region's demand grew by 5.5%. Still, Asia is expected to remain the largest contributor to global demand growth, accounting for around one-third of incremental gas demand in 2025.
Europe is set to drive LNG demand growth in 2025, with LNG inflows climbing to near all-time highs
Following the sharp decline in 2024, Europe's LNG imports are set to recover in 2025. Europe's LNG imports declined by 18% (or close to 30 bcm) in 2024. This trend was reversed in Q1 2025, when Europe increased its LNG imports by more than 20% (or over 9 bcm) y-o-y amid lower piped gas imports and stronger domestic demand. Higher storage injection needs together with lower piped gas inflows are expected to support stronger LNG imports throughout the filling season3. For the full year of 2025, Europe's LNG imports are expected to increase by 25% (or over 30 bcm) and reach levels near to their all-time highs.
In contrast, Asia's LNG imports are forecast to decline due to the strong competion from Europe for flexible LNG cargoes. China's LNG imports declined by around 25% y-o-y in Q1 2025, their steepest decline since the 2022 global gas crisis. This highlights the growing balancing role of China in the global gas market, supported by its gas-to-coal switching capability and flexibility options embedded in its vast portfolio of long-term LNG contracts.
The development of trade in low-emissions gases requires closer international cooperation and greater policy support
This edition of the quarterly Gas Market Report provides an overview of the key policy initiatives and market developments related to the nascent trade in low-emissions gases, which can play an important role in decarbonising gas supply chains and the broader energy system.
Trade in low-emissions gases is gradually taking off. Japan imported its first bio-LNG cargo in the spring of 2024, while Ukraine delivered the first piped biomethane supplies to the European Union in early 2025. The European Commission plans to launch a hydrogen pilot mechanism by September 2025, and Japan continues to advance e-methane trade projects with its international partners. Fostering the development of low-emissions gases trade will require the establishment of mutually agreed emissions standards and internationally applicable greenhouse gas accounting rules. Furthermore, policy support would need to focus on mechanisms which can support the conclusion of long-term sales and purchase contracts between emerging producers and consumers.
Source: IEA