The EU is planning to phase out its reliance on Russian-sourced natural gas by 2027 due to the ongoing conflict between Russia and Ukraine. In 2023, Russia supplied only 14 percent of the EU’s natural gas needs, down from 45 percent in 2021. As a result, Russia has shifted its focus to exporting natural gas to China and India.
Global natural gas demand increased by 0.5 percent in 2023, with growth in China, North America, Africa, and the Middle East partially offsetting declines in other regions. China, in particular, saw a 7.2 percent rise in natural gas demand as its economy continued to recover from the pandemic.
Conversely, Europe experienced a 6.9 percent decrease in natural gas consumption in 2023, reaching its lowest levels since 1994. This decline was driven by the rapid expansion of renewables and increased availability of nuclear power, reducing the need for natural gas and pushing prices lower.
The United States remains the largest natural gas producer globally, contributing nearly a quarter of the world’s total production. The country’s natural gas output has increased significantly in the past decade, driven by the rising cost of coal and advancements in extraction technologies like horizontal drilling and fracking. Additionally, the US is the largest consumer of natural gas and a major LNG exporter.
Russia, the second-largest natural gas producer, has the largest known reserves globally but faced a 41 percent decline in revenues in the first three quarters of 2023 due to Europe’s rejection of its natural gas products.
Iran, the third-largest natural gas producer, has been increasing its production capacity and aims to boost output by 30 percent in the next five years through significant investments in its gas fields.
Other top natural gas producers include China, Canada, Qatar, Australia, Norway, Saudi Arabia, and Algeria, each playing a crucial role in the global natural gas market.
Overall, the natural gas industry is undergoing significant changes due to geopolitical tensions and shifting energy demands, with countries like the US and Europe looking to diversify their natural gas sources and reduce reliance on Russian imports.
