According to the Oxford Institute for Energy Studies’ Quarterly Gas Market Review (July 2025), global LNG supply rose in Q2 2025 as Asian demand, especially China’s, fell, freeing cargoes for Europe. European imports increased by 30% year-over-year, driven by storage needs and reduced pipeline flows. Key U.S. LNG projects advanced after export approval resumed; Canada shipped its first LNG cargo, and Senegal–Mauritania’s GTA project became fully operational. A June gas price spike, tied to Middle East tensions, underscored the ongoing geopolitical risks. After the conflict eased, European gas demand declined in Q2, primarily from the residential and industrial sectors, while gas-fired power demand increased in tandem with renewables. Storage refill improved but remained below targets, with injection pace crucial for winter prices. Expanding LNG supplies from North America and Qatar are expected to influence markets through 2026 and beyond. They write:
The gas price spike driven by the late June Israeli and US attacks on Iran’s nuclear programme was a useful reminder that Middle East geopolitics continues to cast a shadow over traded oil and LNG in the Gulf, even if on this occasion, concerns about a wider conflict that would have threatened the passage of tankers through the Strait of Hormuz proved in the end, overdone. If anything, oil prices rather than gas prices have historically reflected this kind of regional security risk. But Qatar’s role as a key gas and LNG producer meant that supply risk on this occasion was as much about LNG as oil. It seems that exposure to Middle Eastern conflict is a coming-of-age moment for global traded gas – perhaps evidence of just how international the market has become in recent years.
However, once the dust had settled on the short-lived Iran conflict, TTF futures settled close to year-to-date lows, exposing the vulnerability of the global macroeconomic outlook and the gradual loosening of gas market balances as new LNG trains come onstream and global gas demand remains somewhat muted. In fact, the tentative European gas demand rebound narrative that we had been observing in recent quarterlies came to a grinding halt in Q2. The decline was led by the residential and commercial sector, down 16 per cent year-on-year and also by industrial demand, which fell 4 per cent in the quarter, undoing the tentative rebound seen in 2024. Gas to power remains the only bright spot in Europe as the renewables build-out requires increasing bursts of gas to back up intermittency. The increasing role of renewables in the European power mix is a volatile element in the demand picture that is hard to predict, but increasingly becoming the market feature to watch year-round.
After a colder winter than the previous two years, refilling storage over the summer months in 2025 continues to be a supportive feature. Fill rates were higher year-on-year in Q2, even if absolute storage fill remains off the pace. While the forward curve provides slightly more financial incentive to store than was the case in Q1, the EU’s relaxation of storage targets has taken some of the urgency out of stock replenishment. How quickly shippers inject gas in Q3 will be critical to how forward prices set up for winter gas in 2025/26.
Finally, the emergence of new LNG supply as projects ramped up in North America and Qatar increased volumes from existing trains underlines the impact these two growth producers will increasingly have on balances over the rest of the decade. The price at which global consumers will be able to absorb these incremental cargoes will be the defining feature, not just of the remainder of 2025, but for 2026 and beyond.
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