IEA warns of complicated global gas supply as winter approaches

Agency report

The International Energy Agency (IEA) has warned that rising global gas consumption and geopolitical tensions may complicate supply as countries approach winter.

According to the agency’s latest report, industrial demand, particularly from Asia, is driving a significant increase in gas usage.

The agency projected a global gas demand to rise by over 2.5 per cent this year, reaching a record high of 4,200 billion cubic metres.

This should be with an additional increase of 2.3per cent anticipated by 2025.

One of the main uncertainties as European winter approaches was the transit of Russian gas through Ukraine, the IEA said.

Current contracts were set to expire at the end of 2024, which could potentially halt all Russian gas supplies to Europe via this route.

The IEA added that Europe would need to increase its imports of liquefied natural gas (LNG) in the coming year.

This would place additional pressure on global supplies, as LNG is essential for maintaining the balance between supply and demand.

The IEA said that while bottlenecks in the Panama Canal and the Red Sea were impacting shipping, they had not yet resulted in a decline in LNG supplies.

However, these issues expose vulnerabilities in the LNG trade within an increasingly interconnected global gas market.

The agency recommended increasing flexibility in the gas and LNG value chains and emphasised the importance of integrating Ukraine’s gas storage system into the global market.

The IEA’s director for energy markets and security, Keisuke Sadamori, said that the growth in global gas demand this year and next indicates a gradual recovery from the energy crisis that impacted markets significantly.

However, he cautioned that the balance between supply and demand remains fragile and subject to fluctuations, emphasising the need for close collaboration between producers and consumers.