Gas
Global gas demand shifts amid supply shocks and renewables rise
Geopolitical conflict and soaring prices have altered short-term natural gas demand, though long-term growth prospects remain tied to industrial uses and data centres.
Key points
- Middle East supply disruptions have driven up import costs and forced economies to rely more heavily on renewables and coal.
- Data from Ember indicates that the share of gas in the global power mix declined for the fifth consecutive year in 2025.
- Major industry players like Shell project long-term LNG demand to increase significantly by 2050, supported by Asian growth and expanding data centre needs.
What happened
According to reporting by OilPrice.com, recent conflicts and constraints on liquefied natural gas supply from the Middle East have disrupted near-term demand forecasts and inflated import costs. Economies across Europe and Asia have increasingly turned to renewable energy sources and coal for power generation to compensate for constrained gas supplies procured at elevated prices.
Data from the think tank Ember, cited in the reporting, shows that the share of gas in the global power mix dropped for the fifth consecutive year in 2025. While absolute gas generation saw a minor increase, strong expansion in solar and wind power met roughly 68 percent of global electricity demand growth over the five-year period leading up to 2025. Major markets including the UK, the Netherlands, Turkey, China, Japan, and South Korea recorded declines in the proportion of gas-fired electricity.
Despite the shifting power generation landscape, industry stakeholders maintain that fundamental long-term demand remains resilient. Natural gas continues to play an irreplaceable role as a chemical feedstock for fertilizers, plastics, and industrial manufacturing. Furthermore, expanding artificial intelligence data centres are expected to drive up future electricity consumption, requiring backup and baseline power sources such as natural gas.
What comes next
Major global energy traders and international bodies project substantial expansion in the liquefied natural gas sector over the coming decades. Shell anticipates that rising demand in South and Southeast Asia will elevate global LNG consumption by 65 percent by 2050 compared to 2025 baselines, reaching nearly 700 million tons annually.
Industry representatives emphasize that investments in both supply and import-export infrastructure will remain essential to accommodate long-term requirements. While renewable energy integration accelerates, gas is expected to adapt its function within the broader energy architecture, balancing intermittent clean power generation while serving vital industrial sectors.
Why it matters
For energy investors and policymakers across Africa and Nigeria, the ongoing evolution of global gas markets highlights the complex interplay between energy security, price volatility, and the clean energy transition. As international markets react to supply shocks—reflected in recent US EIA benchmarks showing Henry Hub gas spot prices at 2.76 US dollars per MMBtu and Brent crude at 123.10 US dollars per barrel in late October 2026—African producers must carefully evaluate long-term export strategies.
While European and Asian economies accelerate renewable rollouts to mitigate exposure to fuel price spikes, gas-rich nations in Africa retain significant opportunities to monetize domestic and international reserves for industrialization and baseload power. However, changing global demand patterns underscore the necessity for flexible infrastructure investments that can withstand geopolitical disruptions and align with shifting international energy priorities.
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 2024Written 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.
