Gulf LNG recovery to ease global gas prices from 2027, but supply risks remain: GlobalData
By Anoop Menon
Global gas markets are expected to normalise as liquefied natural gas (LNG) exports from the Gulf recover from 2027, rather than settle at permanently higher price levels following the 2026 disruption in the Strait of Hormuz, according to market intelligence platform GlobalData.
The disruption, which curbed access to a fifth of global LNG supply and damaged 12.8 million tonnes per annum (mtpa) of liquefaction capacity in Qatar, represents a transport and infrastructure shock rather than a shortage of gas resources, said Paul Hasselbrinck, Oil & Gas Lead Analyst at GlobalData
Although global production rose in 2026, prices in Europe and Asia rose in reaction to closure of the main shipping route and a small share of liquefaction damaged, he noted.
According to ‘GlobalData Gas Market Outlook 2026’ report, Middle Eastern gas production will decline by 98 billion cubic metres (bcm) in 2026, limiting global supply growth to 14.9 bcm against potential demand growth of 37.7 bcm. The firm estimates that 38-59 bcm of potential demand will remain unserved because of supply constraints.
Hasselbrinck said the recovery in the global gas market from 2027 is expected to be U-shaped rather than a rapid V-shaped rebound.
While Gulf LNG exports are expected to recover from 2027, 281.3 mtpa of liquefaction at construction or commissioning stage, mostly in the US and Qatar, is scheduled to start up by 2031. The resulting supply surplus is projected to peak at approximately 200 bcm in 2029, before growing demand closes it quickly/ The market is expected to return to balance in 2034 before moving into deficit in 2035.
“The market has spent two years debating a gas glut. GlobalData’s field-by-field data show that the glut is real but short, and that the question for the 2030s is not whether there is enough gas in the ground, but whether the pipelines and LNG plants get built where that gas is,” said Hasselbrinck.
Infrastructure investment gap
He underlined export infrastructure and upstream investment as key factors determining global gas availability in the next decade. In the frontier markets, 166 bcm of upstream gas supply planned for 2035 lacks a sanctioned or final investment decision (FID)-dated route to market, with Senegal, Tanzania, Mauritania, Guyana and Cyprus accounting for most of the volume.
The US, on the other hand, faces the opposite problem to the frontier markets.
“Its approved and FID-dated liquefaction needs about 400 bcm more gas in 2035 than US companies have yet committed to produce,” explained Hasselbrinck. “Whether that gas arrives will set how far the transatlantic price spread narrows.”
Without investment in export infrastructure in the frontier markets and sufficient upstream production in the US, GlobalData expects the global gas market to face renewed supply constraints by the middle of the next decade.
“The decisive variable for supplying the 2030s is infrastructure,” he said.
Global gas demand is forecast to increase by just under 20 percent between 2025 and 2035 to 5,180 bcm, representing a compound annual growth rate of 1.8 percent.
Power generation is expected to account for 432 bcm of incremental demand, while the Asia-Pacific region will contribute 284 bcm.
Hasselbrinck expects downside risks to demand to outweigh potential gains from lower LNG prices and AI-driven electricity consumption.
“For demand, the risks to the reference demand outlook are asymmetric and skewed to the downside,“ he said. “The upside from cheaper LNG or an AI-driven power boom is bounded at a combined 3.5 percent of 2035 demand, about a quarter of the 8 percent downside from accelerated transition.”
(Writing by Anoop Menon; Editing by SA Kader)
(anoop.menon@lseg.com)
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