Global Gas Markets Bracing for Prolonged Supply Squeeze Amid Middle East War
Global gas markets are bracing for a prolonged supply squeeze due to the ongoing Middle East war, according to the International Gas Union (IGU). The conflict is disrupting liquefied natural gas (LNG) exports from the Gulf region and complicating Europe's efforts to rebuild its inventories. LNG traders expect elevated prices and supply risks to persist through next summer before easing.
The IGU Secretary General, Menelaos Ydreos, stated that futures markets now point to tight supply conditions lasting into next year, a shift from earlier expectations of declining prices after the winter. Europe is competing aggressively with Asian buyers for LNG as it seeks to refill storage facilities, outbidding them in some cases.
The current crisis differs from the 2022 energy shock caused by the Russia-Ukraine war because disruptions are affecting several regions simultaneously. Demand has weakened in the short term, but it remains unclear whether consumption will rebound once conditions stabilize or if policy changes will have longer-lasting effects.