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- This blog post is part of a special series based on the April 2025 Commodity Markets Outlook, a flagship report published by the World Bank. This series features concise summaries of commodity-specific sections extracted from the report. Explore the full report here.
By Paolo Agnolucci and Nikita Makarenko
The World Bank’s natural gas price index retreated in April and May after reaching a two-year high in February. The US benchmark price declined by 18 percent and 8 percent month-on-month (m/m) in April and May, after surging by 70 percent in 2025Q1 (q/q). The recent decline reflects the resolution of previous supply disruptions and weakening demand for Liquified Natural Gas (LNG) in Asia.
Following a 12 percent drop in April (m/m), the European benchmark remained largely unchanged in May, erasing all gains made in 2024Q4 and 2025Q1. The decline reflects waning competition from East Asia for LNG supplies, despite upward price pressure from low inventories. Japan’s benchmark LNG price has been relatively steady, held back by the effect of moderating oil prices on oil-indexed LNG contracts and by soft demand in the region amid mild weather.
After rising 2.7 percent in 2024, growth in global consumption is expected to moderate in 2025. Consumption increased by approximately 110 billion cubic meters (bcm) in 2024, a strong rebound from the modest 35 bcm growth in the previous year. The Asia Pacific region led the increase, adding 49 bcm (y/y)—largely driven by China—followed by Eurasia, which grew by 25 bcm (y/y), mainly due to higher consumption in Russia.
Consumption in North America increased by 21 bcm, supported by low prices, while demand in the Middle East continued to expand, as countries tapped into regional assets to support power generation and industrial use. In contrast, European consumption remained stable in 2024, following two years of declining consumption triggered by the Russian invasion of Ukraine. Looking ahead, growth in global consumption is expected to moderate in 2025, before bouncing back in 2026. These expected changes are mainly driven by Asian Pacific and the Middle East, while consumption in Europe and North America is likely to stagnate.
After rising 1.2 percent in 2024, growth in global production is expected to increase in 2025 and 2026. Supplies rose by approximately 50 bcm in 2024—double the growth recorded in the previous year. Russia accounted for most of this increase, with output rising by 47 bcm, nearly returning to 2020 levels, as expanded LNG trade offset the loss of pipeline exports to Europe.
US natural gas production was stable, despite historically low prices, as rising oil output drove an increase in associated natural gas production. The United States remained the world’s largest LNG exporter in 2024, with about half of its shipments directed to the European Union. In 2025, supply growth is expected to be evenly distributed among the four main producing regions—Asia Pacific, Eurasia, the Middle East, and North America. In 2026, a significant expansion in Qatar is projected to account for almost half the anticipated 108 bcm increase in global production.
The World Bank’s natural gas index is projected to rise over the next two years, although risks remain tilted to the downside. The US benchmark price is expected to increase by more than 50 percent in 2025, followed by a modest 3 percent in 2026. The European gas price is anticipated to rise by 6 percent in 2025, before declining by 9 percent in 2026. The primary downside risk to this outlook is weaker-than-expected demand, particularly in the Asia Pacific region, which is projected to account for more than half of global consumption growth in 2025 and 2026.
Additional downside risks include surging natural gas production—especially in the United States—and potentially in Russia, should diplomatic breakthroughs bring an end to the Russian invasion of Ukraine. Upside risks to prices could stem from the need to replenish depleted inventories—particularly in Europe—and from stronger competition for LNG supplies if trade uncertainty eases and global growth prospects improve. Extreme weather also poses upside risks: severe cold temperatures boost consumption (and potentially disrupt production), while heatwaves, droughts, and reduced wind speeds reduce renewable power generation, thus increasing reliance on gas-fired power plants.
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