Global Natural Gas Market - Strategic Insights and Forecasts (2026-2031)

The global natural gas market is projected to register a strong CAGR during the forecast period (2026-2031).

According to the U.S. EIA, natural gas statistics from 2025, the United States, Russia, and Iran are the three main sources of natural gas. Natural gas is generally consumed in OECD Asia and Europe. In 2025, the United States produced over 118 billion cubic feet (Bcf) per day, producing at a record high rate due to an unprecedented demand for LNG exports. In Asia, the demand exceeds the supply of natural gas; therefore, Europe continues to be dependent upon natural gas imports for its energy security.

Market Dynamics

Drivers

• Power Generation and Heating Demand - According to the EIA, natural gas made up approximately 38% of total US electricity generation for 2024-2025. The high need for flexibility in supply has driven peak natural gas usage above 100 Bcf over the winter months, in addition to affecting other usage patterns across the world. Similar events have affected European energy balances, where natural gas is crucial to grid stability amidst broader levels of renewable development.

• LNG Export Expansion and Global Market Integration: According to the EIA’s 2025 LNG export data, the US became the largest global exporter of LNG at a capacity of 12 Bcg/d and made changes in how LNG supplies around the world are distributed. As the LNG exports continue to expand and affect how global supply and pricing are linked to the US Henry Hub, access to LNG supplies for countries fully dependent on imports (Europe, Asia) is improved.

Restraints and Opportunities

• High price volatility driven by LNG-linked global trade exposure, with U.S. EIA data showing Henry Hub natural gas prices averaging around $3.52/MMBtu in 2025, up from about $2.19/MMBtu in 2024, influencing import costs across Europe and Asia through indexed LNG contracts and global arbitrage transmission.

• According to U.S. EIA and European national energy statistics, the global gas market is shifting toward LNG-dominated trade flows, reducing reliance on fixed pipeline systems. This creates opportunities in floating storage, regasification infrastructure, and long-term LNG contracting. Emerging economies are increasing gas-to-power adoption, while OECD countries are balancing decarbonization policies with short-term gas security requirements.

Supply Chain Analysis

In 2025, the majority of global natural gas supply will be supplied through liquefied natural gas (LNG). The U.S. will account for an estimated 12 bcf/D of LNG capacity in that year, connecting production hubs in North America to demand centres in Asia and Europe. While Russia and Iran will still have a significant role as pipeline suppliers, they will be severely constrained by geopolitical factors, including U.S.-Iran tensions and regional instability in the Middle East that affects shipping routes through the Strait of Hormuz, impacting global LNG freight security and price volatility between interconnect gas markets.

Government Regulations

Key Developments

• October 2025: TotalEnergies’ final investment decision on Rio Grande LNG Train 4 with 1.5 MTPA offtake supports global natural gas markets by adding long-term liquefaction capacity, improving LNG supply availability for import-dependent regions. It strengthens contract-backed supply security, reduces short-term price volatility, and enhances flexibility in global LNG trade flows through additional diversified export capacity from North America.

• February 2025: Shell reported that more than 170 million tonnes of new LNG supply is set to come on to the market by 2030, which will help to meet growing long-term global demand for gas. But project start-up timings remain uncertain.

• April 2026: GAIL (India) Limited signed a long-term charter agreement with Alpha Gas for an LNG carrier, strengthening dedicated LNG shipping capacity for India’s import supply chain. This improves cargo scheduling flexibility, ensures more stable LNG availability at regasification terminals, and reduces exposure to spot shipping constraints across Asian LNG trade routes, where demand balancing between importing countries is becoming increasingly competitive.

• January 2025: In 2025, Chevron entered a strategic partnership with Engine No. 1 to develop natural gas-fired power plants integrated with data centres in the United States.

• April 2026: The Export-Import Bank of the United States (EXIM) Board of Directors approved more than $2 billion in export credit insurance to support U.S. liquefied natural gas (LNG) exports to Egypt. This authorisation will put U.S. energy molecules to work in a critical market and deepen a strategic relationship that secures supply chains and opens new doors for U.S. industry.

Market Segmentation

By Method

The vast majority of the globe's natural gas supply will come from conventional methods of extraction, including both conventional drilling and horizontal drilling, with an estimated percentage (>90%) of future U.S. gas wells being horizontal as well as utilizing hydraulic fracturing to produce substantial amounts of tight and shale gas, especially from the locations of the Pebble and Appalachian basins that will provide an expanding supply of natural gas.

By Location

Natural gas production is based primarily in North America, comprising 60% of all global production. The U.S. will be the leading producer in 2025 with 118 billion cubic feet per day of production, followed by Russia (66 bcfd) and Iran (45 bcfd). Both offshore reserves of natural gas in the Gulf of Mexico and the Middle East will continue to exercise influence over natural gas supply, while shale basins from both Mexico and the Gulf Coast will dominate US natural gas production in 2025. Europe currently relies heavily on imports of natural gas, thereby creating greater reliance on LNG imports due to pipeline constraints extending from North America to both Atlantic and Pacific supply hubs.

By Application

Natural gas is primarily used for power generation, industrial use, and residential heating purposes. In a recently completed analysis by the U.S. EIA of electricity generation data from 2025, In 2025, the United States generated 4.43 thousand terawatthours (TWh) of electricity, up 2.8% from 2024 generation. It will play a significant role in balancing overall grid supply during periods of peak electricity demand. Extremely strong levels of industrial gas consumption will occur in both the chemical and refining industries, whereas residential natural gas consumption represents high levels of consumption.

Regional Analysis

The Asia-Pacific region is driving global demand growth as China and India expand their domestic gas grids. North America is maintaining its position as the dominant global supplier, with record-high production from the Permian Basin supporting a new wave of export terminals. Europe is navigating a structural decline in demand while simultaneously building massive import capacity to replace lost pipeline volumes. For pipeline gas and LNG combined, Russia accounted for around 12% of total EU gas imports in 2025. The Middle East is reinvesting gas revenues into liquefaction expansion to capture market share from declining European producers.

Company List

ExxonMobil

Royal Dutch Shell

BP

Chevron

TotalEnergies

Equinor

ConocoPhillips

Eni

Gazprom

PetroChina

TotalEnergies

TotalEnergies is working on expanding and integrating its liquefied natural gas (LNG) and upstream portfolios while continuing to manage a disciplined approach to capital investments. In the official results released for 2025, TotalEnergies invested approximately $17.1 billion, with a significant portion going to oil and gas projects as well as low-carbon transition assets. Some of the recent developments include ongoing expansion of LNG and a focus on optimising the portfolio, which includes potentially restructuring certain assets in the North Sea in 2025 to increase operational efficiency and provide long-term stability of cash flow through global gas markets.

Equinor

Equinor continues to strengthen its global position with respect to gas and LNG investments while working on energy transition investments. Based on the official reporting by Equinor and project announcements, Equinor is involved in UK carbon capture and storage projects that are anticipated to be executed in 2025, along with partner TotalEnergies and BP. The investment in carbon capture and storage projects supports the long-term decarbonization of the gas system while supporting the stability of upstream gas production from the Norwegian Continental Shelf, thereby securing Europe's natural gas supply in light of the continent's structural dependency on gas imports.

PetroChina

PetroChina is building on its existing domestic natural gas infrastructure and expanding its domestic storage capacity to support China's energy security initiatives. Based on the official filings of PetroChina for 2025 and public disclosures, PetroChina announced the acquisition of major natural gas storage assets from CNPC that will increase its storage capacity by approximately 10.97 billion cubic meters. This project supports the increasing demand for natural gas in China while enabling improved seasonal balancing and further supports the integration of upstream and midstream operations through China's national pipeline and storage network.

Analyst View

The natural gas market is transitioning into a commoditised, globalised system dominated by LNG. Suppliers that prioritise methane reduction and destination flexibility will capture the highest value as energy security becomes the primary driver of procurement.

Natural Gas Market Scope: