Global Gas Report: 2026 Trade Volume Expected to Decline by 7 Billion Cubic Meters

en.Wedoany.com Reported - Rystad Energy, the International Gas Union, and Italian gas group Snam have jointly released the Global Gas Report 2026. Due to the Strait of Hormuz crisis and its aftermath, estimating natural gas supply and demand this year has become significantly more challenging.

The report's authors caution that these estimates remain contingent on the trajectory of the conflict and the specific terms of the crisis resolution following the memorandum of understanding (MOU) signed between the United States and Iran.

The overall tone of the report is cautiously positive, anticipating that once the temporary effects of the crisis subside, demand will return to a structural growth trajectory. The authors highlight projects that have reached final investment decision (FID) so far in 2026, with a combined liquefaction capacity of 35 million tonnes (Mt) and regasification capacity of 25 million tonnes (Mt), stating this reflects developers' continued confidence in long-term demand growth.

Global natural gas supply is expected to decline slightly. In 2026, global natural gas production is projected to decrease by 4 billion cubic meters (bcm), down 0.1% year-on-year. Experts believe that the impact on Middle East production will be largely offset by growth in the United States and other regions, a trend already evident in the first half of this year.

On the trade front, the report projects global natural gas trade volume will contract by 7 billion cubic meters to 1,083 billion cubic meters, reversing the growth trend seen in 2024 and 2025. This estimate is also linked to supply disruptions caused by the Strait of Hormuz crisis. Specifically, pipeline gas flows are expected to decline by 17 billion cubic meters, affected by the substitution effect of Russian gas; liquefied natural gas (LNG) trade volume is projected to grow by 9 billion cubic meters, partially offsetting the decline in pipeline gas.

Global natural gas demand in 2026 is set to dip slightly, with the report projecting a decline of 7 billion cubic meters, a year-on-year decrease of 0.2%. This decline is not uniform but rather a combination of regional trends: the Middle East (-17 bcm, -2.7%), Europe (-4 bcm, -0.8%), Russia (-2 bcm, -0.5%), and Asia (-2 bcm, -0.2%) all see decreases; North America (+10 bcm, +0.9%) and South America (+8 bcm, +4.7%) post growth, while Africa remains broadly flat (+0.3 bcm, +0.2%). Growth in North America is primarily driven by the power sector (+11 bcm), where gas-fired combined cycle plants remain a key source of electricity to meet demand from data center expansion.

In terms of demand growth structure, the evolution of U.S. natural gas demand is an exception globally. The report projects that in 2026, the main driver of demand growth will be the transportation sector (+9 bcm, up 7.0% year-on-year), supported by strong sales of LNG-powered heavy-duty trucks in China, with first-quarter 2026 LNG truck sales exceeding 51,000 units. This is followed by the power sector (+6 bcm, up 0.4% year-on-year), influenced by renewable energy growth (particularly in Europe) and fuel-switching effects in a high gas price environment.

European natural gas demand forecasts carry significant uncertainty. The report projects a 0.8% year-on-year decline in European gas demand, an estimate based on the assumption that European demand is highly elastic to higher gas prices. To date, European TTF gas prices have risen 140% this year, while U.S. Henry Hub prices have fallen 21% over the same period. The report suggests that as Asian buyers intensify competition for flexible U.S. LNG supplies, Europe may face a more competitive environment in procuring the cargoes needed to refill storage, which will complicate achieving official winter gas storage targets. The report assumes that demand sensitivity to higher prices may increase, while acknowledging that the actual impact will depend on price dynamics, weather conditions, and the availability of alternative supply sources.