IGU forecasts global gas squeeze to last through next summer

September 27, 2026 at 04:00 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The International Gas Union forecasts global natural gas supply will remain tighter than normal until at least next summer. The tightness could cause prolonged demand destruction, with Europe outbidding Asia for LNG cargoes to refill storage. Goldman Sachs expects European gas prices to average 70 euro per MWh this winter.

Key Facts

The International Gas Union represents 90% of the world's gas producers.
IGU Secretary General Menelaos Ydreos said Europe is outbidding Asia for LNG to refill storage levels.
Goldman Sachs expects European gas prices to average 70 euro per MWh this winter, up from an earlier forecast of 30–60 euro.
LNG exports from the Persian Gulf are at an estimated 15%–25% of pre-war levels following the February 2026 conflict between Iran, the US, and Israel.
Southeast Asian countries are still building gas-fired power plants and LNG import capacity despite the price surge, according to Global Energy Monitor.

Supply Tightness Outlook

Global natural gas supply is likely to remain tighter than normal until at least next summer, according to the International Gas Union. The industry association covers 90% of the world's gas producers. IGU Secretary General Menelaos Ydreos told Reuters that the market sees the conflict getting prolonged. He added that Europe is starting to outbid Asia because of the need to refill storage levels. The price surge has already destroyed some demand, but it is unclear whether the dip is temporary or permanent.

Price Forecasts

Goldman Sachs expects European gas prices to average 70 euro per MWh this winter, equivalent to about $80. The bank's earlier forecast was for winter prices between 30 and 60 euro per MWh. Goldman's co-head of Global Commodities Research Samantha Dart said prices could drop to 50 euro per MWh if LNG flows from the Persian Gulf improve. LNG exports from the Persian Gulf remain at an estimated 15%–25% of levels before the February 2026 war between Iran, the US, and Israel. Without improvement in exports through the Strait of Hormuz, European gas prices must rise to outcompete other LNG importers, Dart explained.

Demand Destruction Risk

Ydreos voiced concern about whether short-term demand destruction could lead to longer-term policy implications. A Global Energy Monitor report found Southeast Asian countries are still building gas-fired power plants despite the price inflation. Asian countries are also building more LNG import capacity despite the price surge. Goldman Sachs is not too concerned about the long-term future of gas demand, painting an optimistic scenario for this winter.