Global gas squeeze could persist into next summer as Europe competes for LNG

Global gas supplies could remain constrained until at least next summer, prolonging pressure on consumption as Europe competes with Asia for LNG, OilPrice.com reported, citing the International Gas Union (IGU). The industry association warned that higher prices were already reducing demand, although it remained unclear whether those losses would prove temporary or lasting.

IGU secretary general Menelaos Ydreos told Reuters that market expectations pointed to a prolonged conflict and that Europe was beginning to offer higher prices than Asian buyers to replenish storage. Nevertheless, continued construction of gas-fired power stations in Southeast Asia and additional Asian LNG import capacity suggested demand could recover. OilPrice.com cited findings from Global Energy Monitor on the continued power plant development despite war-related gas price increases.

Restricted Persian Gulf shipments remain central to the supply outlook. According to Goldman Sachs estimates cited by OilPrice.com, LNG exports from the region were running at just 15–25% of their level before war broke out between Iran and the US and Israel in February 2026. Samantha Dart, the bank’s co-head of Global Commodities Research, said Europe would need higher prices to draw cargoes away from other importers unless flows through the Strait of Hormuz improved.

Goldman forecast average European winter gas prices of €70/MWh, compared with its previous projection of €30–60/MWh. An improvement in Persian Gulf LNG flows could bring prices down to €50/MWh from around €70/MWh. Meanwhile, OilPrice.com cited Reuters reporting that European utilities’ coal consumption could increase by up to 25% over the next six months as expensive gas encouraged fuel switching.

A forthcoming EU ban on Russian LNG imports could offer Asian buyers some relief while narrowing Europe’s supply options. OilPrice.com reported that the measure, approved earlier in the year and due to take effect in January, would redirect Yamal LNG cargoes. Ydreos said those supplies could be offered at a discount. He also warned that regulations which were too difficult to meet could encourage suppliers to send gas to other markets.