Commodities Buzz: Global Gas Market Tightness Expected To Continue Well Into 2023-IEA

3 Oct 2022 , 11:13 AM

Russias continued curtailment of natural gas flows to Europe has pushed international prices to painful new highs, disrupted trade flows and led to acute fuel shortages in some emerging and developing economies, with the market tightness expected to continue well into 2023, according to the IEAs latest quarterly Gas Market Report. Natural gas markets worldwide have been tightening since 2021, and global gas consumption is expected to decline by 0.8% in 2022 as result of a record 10% contraction in Europe and unchanged demand in the Asia Pacific region. Global gas consumption is forecast to grow by only 0.4% next year, but the outlook is subject to a high level of uncertainty, particularly in terms of Russias future actions and the economic impacts of sustained high energy prices. Russia has largely cut off gas supplies to Europe in retaliation against sanctions imposed on it following its invasion of Ukraine. This has deepened market tensions and uncertainty ahead of the coming winter, not just for Europe but also for all markets that rely on the same supply pool of liquefied natural gas (LNG). The current gas crisis also casts longer-term uncertainty on the prospects for natural gas, especially in developing markets where its use was expected to rise at least in the medium term as it replaced other higher-emission fossil fuels. Powered by Commodity Insights