IEA forecasts the Middle East conflict could mean tighter gas markets until 2030
The consequences of the US/Israel conflict with Iran will lead to a loss of about 120 billion cubic metres (bcm) of global liquefied natural gas supply between 2026 and 2030, the International Energy Agency has reported.
According to its Gas Market Report for Q2 2026, the loss of nearly 20% of the world’s LNG supply from the closure of the Strait of Hormuz is “distorting short-term gas market fundamentals,” while damage from attacks on Middle East LNG liquefaction facilities is altering the medium-term outlook.
Tighter market conditions for longer
Qatar’s Ras Laffan facility has been offline since early March 2026, resulting in a weekly loss of more than 2 bcm of gas supply. The IEA said Iranian attacks have taken out 17% of Qatar’s LNG export capacity.
Global LNG production fell by 8% (4 bcm) year-on-year in March. Loadings from Qatar and the UAE fell by 9.5 bcm compared to last year, although the decline was partly offset by higher LNG output from new projects in North America and Africa.
The IEA also warned that the conflict could delay much of the new capacity that was expected to come online later this decade.
IEA analyst Gergely Molnár told the Budapest LNG Summit last week that the war was reshaping the medium-term gas outlook. It had been anticipated that a major influx of new LNG capacity from the US, Canada, and Qatar would loosen market tightness, but geopolitical tensions mean tighter market conditions could persist longer than previously expected, through to 2030.
The IEA quarterly report suggested global demand growth is expected to rise by approximately 2% in 2026. However, this is heavily affected by demand-side adjustments and high prices.
US boosts supply to Asia
US producers helped to offset reduced supplies from the Middle East at a time when the IEA projected North American demand remaining largely flat.
Asia absorbed nearly a quarter of all US LNG exports in April — a sharp increase since the Iran conflict started on 28 February — according to preliminary ship-tracking data from financial firm LSEG. It showed shipments to Asia rose more than 175%, from about 970,000 metric tonnes in February to 1.99 MT in March and 2.71 MT in April.
The IEA said demand in the Asia-Pacific region was expected to increase by 4%, driven by emerging markets, but constrained by high prices.
The Gas Market Report said continued renewable energy expansion in Europe was expected to reduce gas demand by 2%, despite the volatility.
Pressure will remain
Molnár said EU gas storage levels are about 30% below the five-year average, and refilling them to the 90% full target ahead of the high-usage winter season would require an additional 10 bcm of gas.
The IEA said gas producers were making efforts to increase supply, but the demand side is set to play a key role in balancing the market, particularly in Asia, where fuel switching is picking up alongside energy-saving measures.
“The current energy crisis highlights the need to further strengthen the architecture of global gas supply security,” added the report.
