Global LNG supply surge in 2026 to loosen market and pressure prices

Global liquefied natural gas markets are set to shift sharply in 2026 as a substantial wave of new liquefaction capacity comes online, increasing supply by roughly 7 percent and outpacing expected demand growth. The step-up, equivalent to about 40 billion cubic meters, will be driven principally by projects in the United States and Qatar, with Canada and other suppliers making notable contributions. Analysts say the change will loosen tight market fundamentals that have prevailed since 2022 and put clear downward pressure on spot and some contract prices.

Independent forecasts converge on the scale of the increase. The International Energy Agency projects a 7 percent rise in LNG supply in 2026, about 40 bcm, while industry modeller Kpler identifies roughly 37 million tonnes per annum of new liquefaction scheduled to enter service that year following 51 mtpa added in 2025. ADI-Analytics frames the shift as the opening phase of a broader capacity expansion, estimating global LNG capacity could jump by more than 150 million tonnes per year by 2030, with Qatar and the U.S. supplying roughly two-thirds of that new volume.

The U.S. has already seen a historic boost in exports. U.S. shipments topped 111 million metric tons in 2025, the first country to surpass 100 mtpa in a single year, and December posted a monthly record of 11.5 million tons. Those flows reflect both new liquefaction trains and high utilization rates, but analysts warn continued midstream constraints could limit the pace and location of further growth. Permian associated gas averaged about 20 billion cubic feet per day in 2025 but requires additional pipeline capacity to reliably reach Gulf Coast liquefaction plants; some relief is not expected until late 2026. Other U.S. projects such as DT Midstream’s LEAP Phase 4 and longer-term Transco downstream enhancements are critical but staggered across 2026 and 2027 timelines.

Demand forecasts suggest Asia will be the key arbiter of how much of the new supply is absorbed. ADI and Kpler project Asian imports to surge in 2026, with ADI forecasting roughly a 10 percent uplift and Kpler projecting China’s demand at about 73 mt in its base case and India rising to roughly 29.3 mt. Both groups note price elasticity: Kpler estimates an additional 2 mt of Chinese demand and 0.3 mt of Indian demand for every $1 per MMBtu decline in prices, underlining how lower prices could quickly restore price-sensitive volumes.

Market implications are sizable. Kpler’s base case sees average Asian spot prices below $10/MMBtu in 2026, a level that would compress margins for U.S. offtakers and revive robust spot buying in Asia without triggering mass cargo cancellations. Trade routes could rebalance as Europe’s heavy absorption in 2025 gives way to Asian purchases if price spreads tighten. Shipping dynamics and geopolitical risks add volatility: analysts note that sustained peace in the eastern Mediterranean could reopen traditional Suez Canal routings and relieve shipping bottlenecks, while ongoing project commissioning risks remain a material source of uncertainty.

IEA Director Keisuke Sadamori cautioned that the coming wave is “poised to ease fundamentals and spur additional demand, especially in Asia,” but warned forecasts are “subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment.” For policymakers and market participants, the near-term priority is clear: monitor commissioning timelines, accelerate critical midstream investments, and prepare for a market that may shift from supply anxiety to price competition within a single year. Longer term, the supply expansion underscores a structural rebalancing in global gas markets and renewed emphasis on infrastructure and trade flexibility as LNG becomes an even larger component of global energy trade.