The Iran war and reduced LNG supply from the Middle East have disrupted global natural gas demand forecasts and import costs. This year, Europe and Asia have turned more to renewables and coal to compensate for high gas prices, reshaping energy policies with a renewed focus on security.
Despite gas being irreplaceable in some industrial processes and essential for reliable electricity supply, its share in power generation has declined in key markets like the UK, Netherlands, Turkey, China, Japan, and South Korea. Ember data shows that 61 out of 124 gas-generating economies have already peaked in gas-fired electricity, though large gas-dependent nations have not.
However, natural gas remains vital for industrial uses like manufacturing, fertilizers, and plastics. The rise of AI and data centers is driving electricity demand growth, which renewables alone cannot meet. This resurgence in demand is expected to sustain long-term gas consumption, particularly in Asia and the U.S.
Major LNG producers like Shell remain optimistic about future demand. Shell predicts global LNG demand will rise by 65% by 2050, reaching nearly 700 million tons annually. The International Gas Union also highlights LNG's role as a stabilizing force in the global energy system, despite geopolitical challenges.