Global gas markets to remain tight well into 2023, IEA says

The intergovernmental organisation estimates international consumption will drop 0.8 p.c in 2022 and develop 0.4 p.c in 2023.

International pure fuel markets will possible stay tight nicely into 2023, the Worldwide Vitality Company has mentioned [File: Hannibal Hanschke/Reuters]

International pure fuel markets will possible stay tight nicely into 2023 as Russia restricts provides and Europe cuts utilization amid excessive costs and vitality saving measures, the Worldwide Vitality Company (IEA) has mentioned.

International fuel consumption is anticipated to drop by 0.8 p.c in 2022 – the results of a report 10 p.c contraction in Europe and static demand within the Asia-Pacific – and develop simply 0.4 p.c subsequent yr, the IEA mentioned in its quarterly fuel market report on Monday.

Nonetheless, the market outlook is topic to a “excessive stage of uncertainty” because of Russia’s future actions and the financial impact of excessive vitality costs over time, the IEA mentioned.

“Russia’s invasion of Ukraine and sharp reductions in pure fuel provides to Europe are inflicting important hurt to shoppers, companies and whole economies – not simply in Europe but additionally in rising and creating economies,” mentioned Keisuke Sadamori, the IEA’s director of vitality markets and safety.

“The outlook for fuel markets stays clouded, not least due to Russia’s reckless and unpredictable conduct, which has shattered its fame as a dependable provider. However all of the indicators level to markets remaining very tight nicely into 2023.”

Russia’s provide of fuel to Europe has dwindled to a trickle because the shutdown of the Nord Stream 1 final month and the latest discovery of leaks within the pipeline.

Moscow has threatened to sanction Ukrainian vitality agency Naftogaz, one of many final remaining Russian fuel provide routes to Europe, a transfer that may exacerbate vitality shortages coming into winter.

Europe has offset the decline in Russian fuel provides by importing LNG and utilizing various pipeline provides from producers comparable to Norway.

The IEA mentioned it anticipated Europe’s LNG imports to extend by greater than 60 billion cubic metres this yr, holding the market beneath strain for the brief to medium time period.

Such a rise may draw imports away from Asia, holding them decrease than final yr for the remainder of 2022, the IEA mentioned.

Nevertheless, China’s new LNG contracts since 2021 and a colder-than-average winter may trigger further demand from Northeast Asia, the Paris-based intergovernmental organisation mentioned.