BAKU, Azerbaijan, November 3. Global LNG supplies are expected to decline by 3%, equivalent to nearly 20 billion cubic meters (bcm), in 2026, marking the largest annual drop ever recorded.
The projection is outlined in the International Energy Agency's (IEA) Global Gas Security Review 2026.
According to the IEA forecast, the ongoing crisis in the Middle East has had a significant impact on global natural gas and LNG markets.
"From March through October, LNG shipments from Qatar and the United Arab Emirates declined by more than 60 billion cubic meters on an annualized basis," the review said.
According to the review, the decline was partly offset by increased LNG production at new projects in North America and Africa, as well as improved feedgas availability among existing producers in Africa, Asia, and Russia.
"As a result, LNG production outside the Persian Gulf countries increased by 14%, or more than 40 billion cubic meters, from March through October on an annualized basis. This offset around two-thirds of the decline in LNG supplies from the Persian Gulf countries over the period.
Overall, global LNG production declined by 6%, or approximately 20 billion cubic meters, from March through October compared to the same period last year," the agency's review says.
Amid disruptions to LNG supplies through the Strait of Hormuz, gas prices in Asia and Europe reached their highest levels since the 2022-2023 energy crisis.
"In Europe, spot gas prices at the TTF hub grew by nearly 70% year-on-year from March through October, averaging around $20 per million British thermal units (MMBtu).
Asian spot LNG prices rose by nearly 80% year-on-year over the same period, averaging $21.5 per MMBtu.
From March through July, Asian spot LNG prices exceeded European prices by around $2 per MMBtu. From August through October, the gap narrowed to about $1 per MMBtu, indicating intensifying competition for flexible LNG supplies ahead of the heating season.
Oil-indexed LNG prices also gradually increased and, according to the IEA's estimates, reached $12-$14 per MMBtu in Q3 2026," the agency reported.
The impact of rising oil prices is expected to become more pronounced in Q4, as oil prices are typically reflected in gas contract pricing formulas with a lag of 5-6 months.
The IEA forecasted that vessel traffic through the Strait of Hormuz will remain largely restricted at least through the end of 2026. Under this scenario, global LNG supplies will decline by 3%, or nearly 20 bcm, in 2026.
