LNG Supply Surge Set to Ease Prices in 2026

Key Moments

Global Supply Wave Starts to Break

Global liquefied natural gas (LNG) production is set to rise sharply this year. Analysts say this will ease the tight market conditions that have lasted since the 2022 Ukraine war. As a result, prices may come under pressure.

Lower prices could boost demand in major importers like China and India. They may also encourage buying in other emerging markets.

Analysts expect 2026 to mark the start of a multi-year supply build-out that runs through 2029. They say rising volumes will keep prices under pressure and support higher consumption in price-sensitive economies.

“2026 is expected to be a transitional year for the LNG market,” said Kpler. “The market is expected to move away from tightness toward ample availability.”

New Capacity and Price Outlook

Forecasts from S&P Global Energy, Kpler and Rystad Energy point to at least 35 million metric tons of new LNG capacity this year. Most of the additions will come from the United States and Qatar. These start-ups could lift global output by as much as 10% year-on-year.

For 2026, supply projections range from 460 million to 484 million metric tons, according to Kpler, Rystad, ICIS and Rabobank.

Major projects set to drive the increase include Golden Pass LNG in the U.S. and the expansion of Qatar’s North Field. Production is also expected to rise at Corpus Christi and Plaquemines LNG in the U.S., LNG Canada, and the Greater Tortue Ahmeyim project offshore Senegal and Mauritania.

With more supply, analysts expect prices to drop. Rabobank, Rystad and Kpler forecast Asian spot LNG at $9.50 to $9.90 per mmBtu in 2026. That compares with $12.45 in 2025.

For European gas priced at the Dutch TTF, Rystad and Kpler forecast $9.50 to $9.74 per mmBtu this year. That is down from $14.20 in 2025.

As prices fall in Asia and Europe, the gap with U.S. Henry Hub is likely to shrink. Analysts at Vortexa, Rabobank and S&P Global Energy say this will squeeze U.S. export margins. That comes as feedgas costs rise.

Asia’s Demand Rebounds, Led by China and India

Asia’s LNG demand fell in 2025 due to high prices and competition from other fuels. Analysts expect a rebound of 4% to 7% this year. They say lower prices will prompt more spot buying, fuel switching, and stockpiling.

New term contracts should also lift imports. Kpler analyst Nelson Xiong expects Chinese demand to rise by 6–7 million tons. He also forecasts Indian demand to grow by 5 million tons.

“Much of the new contracted supply should be absorbed domestically,” he said.

China’s LNG imports fell in 2025 due to weaker industrial activity, tariffs on U.S. cargoes, and stronger domestic gas supply. Rystad analyst Ole Dramdal expects imports to rise to 76.5 million tons in 2026. That would be a 12% increase from 2025.

Dramdal added that China may remarket a surplus of contracted LNG. He also expects Turkey, Malaysia and Taiwan to increase imports by about 6.2 million tons in 2026.

Europe’s Role as a Balancing Market

Europe became a major LNG buyer after it cut Russian gas imports following Russia’s invasion of Ukraine. Analysts say Europe will continue to absorb new supply as it arrives.

Kpler forecasts Europe’s LNG imports will rise by 22 million tons in 2026. Rystad projects an increase of 20 million tons. Energy Aspects and ICIS expect gains near 13 million tons.

Analysts link the rise to higher storage needs, stronger domestic gas use, and growing Turkish demand. They also note that Europe often serves as a balancing market for extra Atlantic basin volumes.

“Europe has been poised to absorb a large share of the new LNG supply,” said Dramdal.

Europe may also phase out more Russian pipeline gas and LNG this year. Analysts expect Yamal cargoes to shift to markets like Turkey and Egypt. Meanwhile, Europe would replace those volumes with Atlantic basin supply.