INSUBCONTINENT EXCLUSIVE:
Natural gas continues to play a pivotal role in the global energy landscape in 2025, balancing industrial demand, geopolitical tensions, and
evolving production capabilities
industrial applications.Global supply-demand dynamicsGlobal natural gas demand grew through the 2024-25 heating season, driven primarily by
However, the International Energy Agency (IEA) forecasts a slowdown in demand growth for the rest of 2025 due to tighter market conditions
and macroeconomic uncertainties
Low storage levels and reduced pipeline exports from Russia have kept market fundamentals tight, prompting increased reliance on liquefied
natural gas (LNG).US production and demandThe United States remains a leading supplier of natural gas
In 2025, US production continues at record levels despite subdued drilling activity
This resilience is attributed to technological advancements and efficiency gains in shale gas extraction
US consumption also hit new highs, driven by industrial use, power generation, and the expansion of LNG export facilities
While industrial use remains significant, the country is diversifying its energy mix with renewables and coal, reducing its reliance on
Globally, industrial demand for natural gas remains robust, especially in sectors like chemicals, manufacturing, and fertilizers, though
production will decline in 2025, largely due to sanctions and reduced pipeline exports to Europe
The shift has forced European nations to pivot toward LNG imports, primarily from the US, Qatar, and Africa
However, the continent faces supply challenges due to reduced Russian imports and limited domestic production
To compensate, Europe is importing LNG at near-record levels
trendsNatural gas prices have succumbed to extreme volatility in the past few years
Following the 2022 energy crisis triggered by the Russia-Ukraine conflict, prices surged to historic highs
In 2023 and 2024, prices moderated as supply chains adjusted, and LNG capacity expanded
However, in early 2025, prices have remained elevated due to tight supply, low storage levels, and geopolitical risks.Looking ahead, natural
gas prices are expected to remain relatively high through the rest of 2025
The IEA anticipates continued tight market conditions, driven by Europe's need to replenish storage and increased competition for LNG
cargoes, keeping upward pressure on prices
However, if economic growth slows further or if weather conditions are milder than expected, prices could stabilize or even decline slightly
Much will depend on geopolitical developments, particularly in Eastern Europe and the Middle East.(The author, Hareesh V is the Head of
Commodities at Geojit Investments Ltd)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own
These do not represent the views of the Economic Times)
