Rapid growth in liquefied natural gas (LNG) supply, led largely by North America, is expected to ease pressure in global gas markets in 2026, supporting a rebound in demand growth amid ongoing geopolitical uncertainty, according to the latest quarterly Gas Market Report from the International Energy Agency (IEA).
The report finds that global gas demand growth slowed to below 1% in 2025, following stronger expansion in 2024. Tighter supply conditions in the first half of last year pushed up spot prices, while weaker industrial activity weighed on consumption, particularly in Asia. Market conditions began to improve from mid-2025 as global LNG production accelerated.
Global LNG supply rose by almost 7% in 2025, with around three-quarters of the increase occurring in the second half of the year. New capacity in North America was the dominant driver, pushing LNG supply into double-digit growth in the latter half of 2025 and contributing to lower spot prices in Europe and Asia. The growing availability of destination-flexible LNG also strengthened links between regional markets, with price correlations reaching record levels.
At the same time, geopolitical and policy developments continued to shape gas flows. These included further market reforms across Asia and a decision by the European Union to phase out Russian natural gas imports by November 2027. Gas prices remained volatile across Asia, Europe and North America in January 2026, reflecting adverse weather conditions and geopolitical tensions.
Investment activity in LNG supply remained strong in 2025, with more than 90 billion cubic metres (bcm) per year of liquefaction capacity reaching final investment decision, the second-highest annual total on record after 2019. The United States accounted for more than 80 bcm of approved annual capacity, reinforcing its position as the world’s largest LNG supplier. Project approvals were accompanied by record LNG contracting activity, indicating continued confidence in LNG’s long-term role in global gas markets.
Looking ahead, the IEA expects global LNG supply growth to accelerate further in 2026 to more than 7%, its fastest pace since 2019. North America is set to contribute the majority of the roughly 40 bcm increase. The additional supply is expected to support global gas demand growth of nearly 2% in 2026, driven mainly by China and other emerging Asian markets.
“The unfolding LNG wave is set to have a central role in shaping global gas markets in the coming years, likely putting downward pressure on prices and improving liquidity as regional gas markets become increasingly interconnected,” said Keisuke Sadamori, IEA Director of Energy Markets and Security. He added that risks remain, including geopolitical tensions and weather-related disruptions, underscoring the need for continued focus on energy security.
