Global natural gas markets reached an all-time high last year and are set to remain tight in 2025 despite an ongoing rebalancing following the supply shock of 2022/23, the International Energy Agency (IEA) states.

In 2024, global gas demand rose by 2.8%, or 115-billion cubic metres, which was well above the 2% average growth rate between 2010 and 2020. At the same time, below- average growth in liquefied natural gas (LNG) output kept supply tight, while extreme weather events added to market strains.

The latest quarterly ‘Gas Market Report’ states that gas prices continued to moderate last year from their peaks of 2022 and 2023, but that European and Asian spot prices remained well above historical averages.

The report states that geopolitical tensions have continued to fuel price volatility in gas markets, but the halt of Russian piped gas transit via Ukraine on January 1 is not expected to pose an imminent security of supply risk for the EU.

Supply to Moldova is vulnerable, though, and it could also increase European LNG import requirements and further tighten global market fundamentals.

The IEA expects similar market dynamics to persist in 2025 with a “wave” of new LNG export capacity, led by the US and Qatar, set to come on line only in the second half of the decade.

Owing to tighter market fundamentals, however, demand growth is also forecast to slow to below 2% this year.

As with 2024, this growth is set to be largely underpinned by markets in Asia, with the region expected to account for over half of the rise in global gas demand.

“Gas market fundamentals have improved over the past year, but for now, we are still seeing significant tightness due to rising demand and muted growth in LNG capacity,” energy markets and security director Keisuke Sadamori said in a statement.

South Africa is paying closer attention to gas-market trends, given expectations that LNG imports will be needed to avert a supply disruption to industrial users when Sasol’s imports from southern Mozambique begin to decline in mid-2027.

LNG is also expected to be needed to supply gas-to-power projects being pursued by Eskom and independent power producers.