EL7.AI
CommoditiesMedium•7 November 2026•
4 min read

International Energy Agency Expects LNG Supply to Fall 3% in 2026

Key Facts

1The International Energy Agency expects global LNG supply to fall 3%, or about 20 billion cubic meters, in 2026, the largest annual decline on record.
2Loadings from Qatar and the UAE fell by more than 60 billion cubic meters between March and October 2026 year on year.
3Asia’s spot LNG price rose about 80% to $21.5 per million British thermal units between March and October.
4European gas inventories could fall below 10% of working capacity by the end of March 2027 under the agency’s scenario.

The International Energy Agency expects global liquefied natural gas supply to fall 3%, or about 20 billion cubic meters, in 2026, the largest annual decline on record, according to its Global Gas Security Review. The agency said the effective disruption of LNG flows through the Strait of Hormuz cut loadings from Qatar and the UAE by more than 60 billion cubic meters between March and October, compared with the same period a year earlier. The report places exports from the two countries at the center of the supply decline, with the disruption’s effects extending to gas markets in Europe and Asia. The agency’s calculations assume that trade through the strait will remain largely disrupted at least through the end of the year. This comes as markets prepare for the heating season amid low European inventories and elevated spot prices.

Agency data show that the disruption’s impact was not limited to Gulf shipments: global LNG production fell 4%, equivalent to 8 billion cubic meters, year on year between March and June. Over the same period, loadings from Qatar and the UAE fell by 35 billion cubic meters compared with the same period in 2025. But an increase in production outside the Gulf of about 18%, or nearly 27 billion cubic meters, limited the impact of the decline in Gulf supply. The agency said this growth offset about three-quarters of the drop in LNG deliveries from the Gulf during that period. The comparison shows that increased production elsewhere eased the shortfall but did not prevent a decline in global output.

On prices, the average European benchmark TTF price rose to about $20 per million British thermal units between March and October, up nearly 70% year on year. Asia’s spot LNG price climbed about 80% to an average of $21.5 per million British thermal units over the same period. The agency said spot prices in both regions reached their highest levels since the 2022–2023 gas crisis. In the second quarter, prices had retreated from their March rise but remained well above 2025 levels. TTF averaged about $16 at the time, up 32% year on year, while spot LNG in Asia averaged $17.5, up 45%.

The supply shortfall coincided with contracting demand. The agency’s preliminary data indicate that global gas consumption fell by more than 1%, or over 35 billion cubic meters, between January and September compared with the same period a year earlier. The decline was concentrated entirely in the second and third quarters, according to the report. The agency expects global demand to fall about 1.5%, or nearly 65 billion cubic meters, in 2026. It attributed the expected decline to contracting demand in the Middle East, lower industrial gas consumption in Europe, and a shift from gas to coal in the power sector in Asian countries. At the same time, limited inventories and storage options among LNG importers could intensify competition for flexible cargoes.

In Europe, EU gas storage sites entered the 2026–2027 heating season with inventories at their lowest levels since 2013. The agency sees low inventories, together with limited storage options in LNG-importing countries in Asia and South America, potentially increasing competition for a limited number of flexible cargoes in the coming months. This competition could add upward pressure to spot prices, the agency warned. In a simulation based on colder-than-average weather and continued disruption to LNG flows through Hormuz, European inventories could fall below 10% of working capacity by the end of March 2027. That level depends on the assumptions in the scenario outlined by the agency being met.

The supply trajectory differs from the period before the March disruption, when global LNG trade grew 12%, or 29 billion cubic meters, between October and February 2025–2026. The agency attributed that growth to the start-up of new liquefaction projects, particularly in North America. Over the past decade, global LNG trade expanded by more than 60%, driven largely by increased liquefaction capacity in the United States. In March 2026, the average price of front-month TTF contracts was $18 per million British thermal units, while Asia’s Platts JKM index approached $21. TTF volatility rose to 160% and JKM volatility to about 300% that month, according to the agency.