The International Energy Agency, IEA, said that the spread of the pandemic and a mild winter in the northern hemisphere is contributing to the biggest demand drop for gas globally.
A 4%, or 150 billion cubic meters (bcm) drop in demand is expected this year which is twice the amount lost after the financial crisis in 2008. Asia, Europe and North America are going to face the biggest drops and will contribute 75% to the global decrease.
Gas markets across the globe are affected by the lockdown and reduced industrial output. Though a rebound is predicted in 2021, IEA says that it cannot achieve the Pre-COVID levels. The industry is temporarily coping by cutting spendings and postponing investment decisions.
“Global gas demand is expected to gradually recover in the next two years, but this does not mean it will quickly go back to business as usual”
Fatih Birol, Executive Director – IEA
“The COVID-19 crisis will have a lasting impact on future market developments, dampening growth rates and increasing uncertainties,” he appended
The demand is predicted to increase in Asian countries like India and China post-2021 as they depend on their industrial sector demand growth. These countries also have strong policy support.
Reports suggest that Liquified Natural Gas, LNG, is set to lead the gas trade globally for the coming years.