Global Gas Demand Expected to Grow in 2024: The New IEA Report
In the face of growing global gas demand, supply falls short of expectations
Throughout 2024, the global energy landscape will face a series of evolving challenges and opportunities, particularly in the natural gas sector.
It is anticipated that global gas demand will increase, driven primarily by lower winter temperatures and a more favorable pricing context.
Developing economies, in particular, are at the forefront of intensifying gas usage, although the landscape is complicated by a range of risk factors, including geopolitical and supply-related issues, which could lead to renewed price volatility.
Global Gas Demand Increased by 0.5% in 2023
The IEA, in a new report, notes that in 2023 the increase in global gas demand was moderate, registering only a 0.5% rise. This modest increase is the result of growth in specific geographic areas—such as China, North America, and some gas-rich regions in Africa and the Middle East—partially offset by a reduction in demand elsewhere.
The post-pandemic economic recovery and the reopening of economies favored China in reaffirming its position as the world's largest importer of liquefied natural gas (LNG), despite its imports remaining below pre-pandemic 2021 levels.
In contrast, Europe saw a 7% decrease in natural gas consumption, the lowest since 1995, due to the expansion of renewable energies and an increase in available nuclear energy.
Global Gas Demand: A 2.5% Increase Expected in 2024
For 2024, projections indicate a 2.5% increase in global gas demand, equivalent to 100 billion cubic meters. This increase is attributed to the forecast of a harsher winter and a significant drop in natural gas prices from the historical peaks of 2022, which favors a rebound in demand.
However, the increase in gas usage in the energy sector is expected to be only marginal, with the expected rise mainly in the Asia-Pacific region, North America, and the Middle East, partially offset by reduced demand in Europe.
From a supply perspective, 2023 saw a globally limited production of LNG, with an increase below expectations that failed to offset the decline in Russian gas supplies to Europe.
Gas Supply Outlook for 2024 Remains Cautious
The United States has emerged as the world's largest LNG exporter, contributing 80% of the additional supply. For 2024, the supply outlook remains cautious, with expected growth being limited, which could, consequently, curb demand, especially in Europe and mature markets in Asia.
In terms of geopolitical risks, according to the IEA analysis, 2024 could witness further uncertainties impacting global gas markets, including potential impacts from Russia's invasion of Ukraine, rising tensions in the Middle East, and concerns over interference in critical infrastructure.
In response to these challenges, various policy and regulatory initiatives have been introduced to ensure economic accessibility and supply security, such as the European Union's joint gas purchasing mechanism.
Finally, the report emphasizes greenhouse gas emissions in natural gas supply chains and the efforts of major global producers and consumers to reduce emissions. Initiatives include biogas, low-emission hydrogen, and e-methane, highlighting a growing political momentum towards low-emission gases and their crucial role in supporting global energy and climate goals.
Download the full report to read the entire IEA study!
