Russia's invasion of Ukraine redefines global natural gas markets. It has exacerbated the tightening supply of natural gas underway since mid-2021, further pushing up consumer prices and leading to fuel switching and demand destruction. It also casts longer-term uncertainty on market prospects for natural gas.

Natural gas demand is expected to decline in 2023 and remain subdued up to 2025. Europe's surging pursuit of LNG to phase out Russian pipeline supply and limited global LNG export capacity additions raise the risk of prolonged tight markets.

Today's record prices and supply disruptions are damaging the reputation of natural gas as a reliable and affordable energy source, casting uncertainty on its prospects.

The European Union's commitment to speed up the phase-out of Russian imports – historically its largest supplier – is transforming Europe's gas market, with repercussions for global gas dynamics.

Europe's surging demand for LNG to replace the Russian pipeline gas supply has led to an exceptionally tight global market. Record high European gas prices have turned the continent into a premium market for LNG, drawing deliveries from other regions and resulting in supply tensions and demand destruction in several markets.