The gas market progressively rebalanced in 2023, after a year of strong tensions resulting from Russia’s invasion of Ukraine. In December, gas prices recorded year-on-year falls of 68% in the United States, 54% in Europe and 39% in Asia. Despite this global decline, gas market volatility remains high and prices remain well above their historical averages, both in Asia and Europe.
According to the latest report released by Crédito y Caución, gas prices will remain high until the middle of this decade as global markets continue to adjust to the loss of Russian gas pipeline supplies to Europe. This will have an impact on prices in other importing regions, although the effects in Asia will be mitigated by the indexation of many long-term contracts to oil prices. After 2025, improving liquefied natural gas transportation capacity will reshape the gas market, reducing prices in key regions.
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Crédito y Caución expects global gas demand to peak in the coming years and begin to decline in the second half of the 2020s. According to the projections included in the report, in a baseline scenario that only takes into account commitments already announced, global gas demand will fall by 7% in 2030 and 42% in 2050, compared to current levels. Forecasts for Europe in this base scenario point to a reduction of 28% by 2030. In a scenario of net zero emissions by 2050, the global decline would reach 78% in 2050.
The share of gas in the energy mix will decrease as renewable energies gain market share, but less than that of oil. China, India and the Middle East will continue to be the main sources of demand growth in the coming decades, while Europe, Japan and the United States will see demand contract.
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On the supply side, the United States is currently the world’s largest supplier of natural gas, followed by Russia and Iran. In the baseline scenario, Russia is expected to be the largest supplier by 2050, followed by the United States and Qatar .
