Natural gas supply security and diversification key to boosting global energy resilience
In an exclusive interview ahead of Gastech 2026, Dr Fatih Birol, Executive Director of the International Energy Agency (IEA), highlights how the Middle East conflict has disrupted global gas markets, the critical need for supply diversification, the upcoming LNG wave, and how surging AI data centres are reshaping gas-to-power demand.
What are your thoughts on the short-term and medium-term outlook for natural gas in light of the Middle East conflict? With a peace deal announced, do you expect the global supply shock to abate soon?
The Middle East crisis has delivered a major shock to global natural gas markets. The gradual easing in market balances that had been underway since the second half of 2025 was significantly disrupted by the de facto closure of the Strait of Hormuz following the outbreak of the war in the Middle East at the end of February 2026.
Between March and June, LNG loadings from Qatar and the United Arab Emirates fell by around 35 billion cubic metres (bcm) compared with the same period last year. About two-thirds of that loss was offset by additional LNG production from new projects in North America and Africa and improved feedgas availability from legacy producers. Even so, global LNG production declined by around 4% over the period, creating market tightness.
Looking ahead, our current assumption is that LNG exports from the Gulf will gradually recover, with operations returning to full capacity by the start of the fourth quarter. Under that scenario, global LNG supply would remain broadly flat in 2026. However, any delays to that recovery could result in the first annual decline in global LNG supply since 2012.
As tighter supply pushes up prices, we expect global natural gas demand to decline in 2026, the third annual contraction this decade. This is largely due to lower demand in the Middle East, as well as in Asia, where higher LNG prices are encouraging greater coal use in the power sector. These developments underscore just how quickly geopolitical events can reshape global gas markets. They also reinforce the importance of supply diversification.
In light of the Middle East conflict, how should policymakers balance short-term emergency measures with the massive investments needed for long-term supply resilience?
Governments are responding to the immediate crisis in different ways, trying to find alternative sources of supply, acting to constrain demand in some cases, and looking to shelter their citizens from the impacts of higher prices.
In many cases they are also rethinking their longer-term energy and investment strategies. Countries are diversifying trade routes and energy sources, including by advancing new pipelines and other supply infrastructure and turning to more domestically available resources. After the 2022 crisis, investment grew in renewables and nuclear, as well as broader measures to strengthen electrification and accelerate investment in energy efficiency.
There are no hard and fast rules on how to balance short-term emergency measures with long-term supply resilience. Each country is dealing with a different set of circumstances, resource endowments and policy challenges. Nonetheless, a key consideration is to ensure that short-term measures do not make the achievement of long-term goals more difficult.
One aspect of this is fiscal — governments often provide broad price support to all consumers during times of crisis, but this quickly becomes very expensive. It would be better to provide more targeted support to those most in need and deploy other available funds towards structural changes that can improve resilience.
What are the ways in which countries and companies can strengthen the architecture of global gas supply security?
The first “golden rule” of energy security is diversification, which can mean exploring alternative supply routes, and avoiding excess dependence on a single supplier or route.
A second consideration is the balance between long-term contracts and reliance on short-term markets. Countries can have different preferences on where this balance lies, based on each country’s needs and their vision for the role of gas in the future, but a portfolio of contract durations and pricing arrangements can help to manage different commercial and security risks.
A third way is to build flexibility and optionality into the system, for example by investing in additional regasification capacity, or ensuring that certain pipelines are capable of being operated in both directions, or building additional connections between national markets. Gas storage is another important area to look at. These investments increase the overall resilience of the system.
Well-functioning markets continue to play a very important role in gas security by giving clear signals to investors all along the value chain and helping to redirect gas efficiently in case of disruptions.
And finally, I want to underline the importance of international cooperation on gas supply security, including closer international cooperation between producers and consumers. The International Energy Agency supports this dialogue through its Gas Working Party and the LNG Producer-Consumer Conference organised jointly with Japan’s Ministry of Economy, Trade and Industry.
With global LNG trade growing by 12% YoY through the October-February period before the war, how can the LNG industry scale up to meet immediate demand without risking stranded assets? What is your assessment of the LNG wave that the industry was talking about before the war?
The LNG wave is still coming, even if its arrival has been delayed by the crisis. There is a huge amount of LNG export projects under development — 2025 was a record year for new project approvals.
At the same time, this is the second major gas crisis in the span of five years, and it is forcing gas importers to take a hard look at their future investment plans. These importers require assurances that gas can be reliable and affordable. Producers should also help make the case for gas by taking the necessary steps to tackle emissions along the supply chain, for example, methane leaks into the atmosphere.
The rapid rise of AI data centres is triggering an unprecedented crunch on power grids. How can gas-to-power providers realistically scale up to meet this high-load demand?
Investment into data centres is surging. Just five large technology companies are on track to spend over $700 billion this year on capital goods and infrastructure — much of it going into data centres. This has led to a rush to provide new generation to match data centre needs.
A large part of this will be grid-connected, but in some cases, when the grid is unable to provide a connection at the speeds the tech sector demands, data centre operators are installing on-site gas-based generation. This is contributing to a 25-year high in gas turbine orders.
Turbine manufacturers are scaling production to meet a significant backlog, but they are also cautious against risks of scaling up too fast. There are also complexities with on-site generation, which is why data centre operators prefer grid connections where possible.
Gas is playing an important role but it’s not the only game in town. Technology companies are investing in new generation from renewables and nuclear, including small modular reactors. Ultimately, the gas industry can benefit from greater transparency on the pipeline of data centre capacity additions. At the IEA, we are working to provide a better line of sight on the future of data centre electricity demand, which we hope will help stakeholders plan better.
What are you looking forward to with your participation at Gastech this year?
I’m looking forward to sharing the IEA’s latest insights on the outlook for global gas and LNG markets at a time of major energy market disruption and heightened uncertainty. I’m also looking forward to using the occasion to engage with policymakers, industry leaders, and other stakeholders at a particularly consequential moment for global energy markets.
