Gas
Global gas supply crunch intensifies amid Middle East conflict and AI demand
Global liquefied natural gas markets face an unprecedented supply squeeze driven by Persian Gulf hostilities and surging energy requirements from data centres.
Key points
- Asian LNG spot benchmark prices have surged past $31 per million British thermal units.
- The International Energy Agency estimates a 60 billion cubic metre supply loss due to the Middle East conflict.
- Rising demand from artificial intelligence infrastructure continues to underpin long-term natural gas consumption.
What happened
Global liquefied natural gas markets are experiencing a severe supply crunch as conflicts in the Middle East remove major export volumes while energy demand from artificial intelligence data centres expands. According to OilPrice.com reporting, Asian spot prices have tripled since the start of the year, with the Japan-Korea Marker topping $31 per million British thermal units.
The International Energy Agency reported that the conflict between the United States, Israel, and Iran resulted in approximately 60 billion cubic metres of LNG supply losses in the eight months leading to October. Although increased production in the United States and Africa offset about two-thirds of this deficit, the global market faces what is projected to be the steepest annual production decline on record at three percent.
Despite the tightening supply and elevated price environment, global gas consumption fell by only one percent over the first nine months of the year, demonstrating strong demand inelasticity. At the same time, major producers like QatarEnergy have extended force majeure measures on domestic exports while securing long-term supply agreements with international operators.
Why it matters
For African energy producers and international investors, the ongoing global gas deficit highlights both the vulnerability of international supply chains and the growing strategic value of regional gas reserves. While Henry Hub gas spot prices stood at $2.63 per MMBtu on November 3, 2026, according to US EIA data, international benchmark disparities continue to shape export economics and trade flows across the Atlantic and Pacific basins.
The intersection of geopolitical supply shocks and surging power requirements for digital infrastructure underlines the critical role that natural gas plays in global energy security. As data centre expansion outpaces the deployment capacity of intermittent renewables, African gas exporters have an opportunity to attract long-term capital, provided that infrastructure bottlenecks are addressed to connect domestic reserves to global markets.
What comes next
Energy analysts expect market tightness to persist into 2027 as Middle Eastern infrastructure repairs take time and new liquefaction capacity ramps up. Industry stakeholders will monitor whether sustained high prices begin to permanently alter consumption patterns or if long-term demand resilience will force a permanent recalibration of global LNG trade routes.
Original reporting
This article draws on the following reports. Read them in full on the publishers’ sites.
Context from CEII
Gas is the flexible backbone of many grids and the designated transition fuel in many national plans, from LNG trade to domestic LPG and CNG. Supply security and pricing drive both power reliability and emissions.
79.2% of electricity in Iran came from gas in 2024Countries in this story
Written by the CEII Desk, the Centre’s automated newsroom, from the reporting credited above and CEII’s own data. Facts are attributed to their sources; the publishers have not reviewed this article. Spotted an error? Tell our editors.
