A sharp rise in liquefied natural gas (LNG) supply is set to play a central role in rebalancing global gas markets in 2026, supporting a renewed acceleration in demand growth after last year’s slowdown, according to the latest quarterly Gas Market Report from the International Energy Agency (IEA).
The report builds on the IEA’s Gas 2025 outlook released in October, which projected a record wave of LNG projects coming online this decade. That expansion is expected to reshape global gas trade flows, deepen market integration and improve affordability for emerging economies as new supply steadily enters the market.
According to the report, global gas demand growth slowed to below 1% in 2025, following relatively strong expansion in 2024. The IEA attributes the deceleration primarily to tighter supply conditions in the first half of 2025, which pushed spot prices higher, combined with weaker industrial activity that dampened consumption, particularly across Asian markets. Market conditions began to ease from mid-2025 as LNG production accelerated.
Global LNG supply increased by nearly 7% in 2025, with around three quarters of that growth occurring in the second half of the year. New liquefaction capacity in North America was the dominant driver, lifting LNG supply growth into double-digit territory in the latter half of 2025. The surge contributed to falling spot prices in European and Asian markets, reinforcing LNG’s role as the marginal balancing supply in global gas markets.
The IEA also highlights that the growing share of destination-flexible LNG has strengthened linkages between regional gas markets, with price correlations reaching record highs.
“The unfolding LNG wave is set to have a central role in shaping global gas markets in coming years,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA. “Nevertheless, a range of risk factors remain, as the volatility in natural gas markets in early 2026 has highlighted.”
Geopolitical and policy shifts continue to reshape global trade flows. Further market liberalisation across parts of Asia and the European Union’s decision to phase out Russian pipeline gas imports by November 2027 are increasing Europe’s structural reliance on LNG, accelerating cross-regional integration.
In Africa, LNG export dynamics remain concentrated. Nigeria retains its position as the continent’s largest LNG exporter, with improved feed gas availability supporting stronger export performance last year. While Africa’s share of global LNG trade remains moderate, the IEA notes that supply reliability and upstream constraints continue to shape the region’s export potential.
LNG market developments are also increasingly relevant for African power systems, where gas-fired generation plays a balancing role in electricity systems undergoing transition. In South Africa, however, domestic gas-to-power ambitions remain constrained following a Supreme Court of Appeal ruling that halted Eskom’s 3,000 MW gas project, slowing implementation of the country’s broader gas roadmap.
Looking ahead, the IEA forecasts that global LNG supply growth will accelerate further to more than 7% in 2026, marking the fastest pace since 2019. This expansion is expected to lift global gas demand growth to nearly 2% in 2026, driven primarily by China and other emerging Asian markets, as the global gas market moves toward a more balanced and integrated phase of development.
