Introduction
The global demand for fossil gas is expected to decrease by 0.5% in 2026, mainly due to lower consumption in the energy and industrial sectors. This will be the third time in seven years that the demand for fossil fuel has fallen.
IEA Projections
The projections are from the Gas market report, by the International Energy Agency (IEA), for the third quarter. The document was published on Wednesday (7/7), a day before the increase in tensions between the United States and Iran, amid fragile negotiations to end the conflict in the Middle East, which again raised the prices of oil and gas.
Impact of the War in Iran
According to the IEA, global gas demand is expected to fall by about 20 billion cubic meters in 2026. Fossil gas consumption also fell in 2020, due to the COVID-19 pandemic, and in 2022, with the Russian invasion of Ukraine.
Regional Variations
The impact of the war in Iran varies by region. In the Middle East, where local gas production and processing facilities were damaged and the production of industries with high fuel consumption, such as fertilizers, decreased, demand is expected to contract by about 4% this year.
In Asia, the IEA forecasts a 0.5% decline in demand, as higher liquefied natural gas (LNG) prices stimulate the substitution of gas with coal in electricity generation and reduce the operation of industries with intensive fuel use.
In Europe, the combination of strong growth in renewable energy production and higher gas prices will reduce fuel demand by more than 2%.
Conclusion
In regions with little or no dependence on LNG imports, the impact of the war will be limited. In Africa, gas demand is expected to remain stable, while in Central and South America it is expected to rise by 3%, with increased electricity generation with the fuel offsetting the decline in hydroelectric production in the region expected due to El Niño.
In North America, the IEA predicts a slight decline, after the relatively mild climate of the first quarter reduced gas consumption in buildings. In contrast, demand in Eurasia is expected to grow by almost 3% this year, due to the lower temperatures recorded in the same period.
Source / Reference
Source: ClimaInfo