IEA Warns of Record LNG Supply Drop and Gas Shortages

The International Energy Agency reports that global liquefied natural gas (LNG) supply is forecast to fall by 3% this year, marking the steepest annual decline on record. This shortfall is primarily driven by the war in Iran, which has caused attacks on regional infrastructure and shipping disruptions in the Strait of Hormuz. These disruptions reduced loadings from Qatar and the United Arab Emirates by over 60 billion cubic metres between March and October.

While production in North America and Africa increased by 14% during the same period to offset losses, overall global production still fell by approximately 6%. Global demand is expected to decline by 1.5% due to industrial reductions in Europe and a shift from gas to coal in Asia.

The supply squeeze coincides with European Union natural gas storage levels reaching their lowest point since 2013 as the region enters the 2026-27 winter heating season. This deficit, combined with limited storage in Asia and South America, is expected to intensify global competition for flexible LNG cargoes and drive up spot prices. Market tightness may extend into 2027 as Europe attempts to replenish its inventories through the following summer.