The International Energy Agency (IEA) announced in its quarterly report released on Tuesday that global natural gas demand will decrease by 0.5% in 2026. This decline will mark the first contraction in four years.
According to the report, the demand contraction amounts to 20 billion cubic meters. This decline in global gas consumption will be the third in the last seven years; the last similar drop was seen in 2022. Although supply from liquefied natural gas (LNG) producers in other regions partially offset the losses in the Middle East, it could not prevent the weakness in demand.
The report stated: “The effects of the war in the Middle East continue to reshape the global natural gas market. Supply declines and high prices are negatively affecting demand in key markets.”
The agency stated that the demand drop in 2026 is mainly due to reduced gas consumption in the energy and industrial sectors and major disruptions in shipments passing through the Strait of Hormuz.
Although LNG tanker traffic increased after the US and Iran reached a temporary agreement in mid-June to end hostilities and reopen the strait, the report emphasized that activity remains well below pre-conflict levels and uncertainty over future trade flows persists.
Natural gas prices in Asia and Europe have eased from their latest peaks in March but remain well above 2025 levels.
Israel and the US launched an attack on Iran on February 28, 2026, and a ceasefire was declared on April 8. The memorandum of understanding signed in June stipulated the cessation of hostilities, the lifting of the US naval blockade on Iran, and the reopening of the Strait of Hormuz.
Negotiations continue after the ceasefire. Most recently, on June 30 in Doha, the Iranian delegation held trilateral talks with Qatari and Pakistani mediators, while US special representatives Jared Kushner and Steve Witkoff met with Qatari officials.
