The World Bank has projected continued volatility in global natural gas prices, warning that geopolitical tensions, supply disruptions, and structural shifts in energy demand will keep markets unstable in the coming years.
The forecast was contained in an analysis based on the April 2026 Commodity Markets Outlook, which examined recent developments in global liquefied natural gas (LNG) markets and provided projections through 2027.
According to the report, global gas markets have been heavily impacted by disruptions linked to conflict in the Middle East, particularly the closure of the Strait of Hormuz, a critical transit route for LNG exports from major producers including Qatar and the United Arab Emirates.
The World Bank said the disruption triggered sharp increases in gas prices across major markets. Asia’s LNG benchmark surged by approximately 94 per cent in March, while Europe’s benchmark rose by about 59 per cent during the same period as buyers competed aggressively for limited LNG supplies.
Although prices moderated in subsequent months, the institution warned that the market remains highly vulnerable to supply shocks and geopolitical developments.
The report noted that the United States LNG benchmark faced comparatively less pressure due to robust domestic production and substantial storage capacity, which helped shield the market from the full impact of global disruptions.
Despite a slowdown in global gas demand growth, which increased by only 0.8 per cent in 2025, supply constraints and regional competition continue to place upward pressure on prices, the report stated.
Looking ahead, the World Bank projected that natural gas prices could rise again in 2026 before easing partially in 2027, depending on the recovery of Middle Eastern LNG exports and the restoration of operations at key energy infrastructure facilities.
However, the institution cautioned that risks remain skewed to the upside. These include prolonged geopolitical tensions, low gas storage levels across Europe, and rising electricity demand from emerging technologies such as artificial intelligence-powered data centres.
The report highlighted concerns over Europe’s relatively low gas inventories compared with historical averages, warning that the region could face challenges replenishing storage levels during periods of peak demand.
At the same time, the World Bank noted that weaker-than-expected economic growth in Asia could reduce demand and help moderate prices. Nevertheless, it stressed that such a development would not fully address underlying supply-side risks.
According to the report, the global gas market is entering a period of heightened uncertainty, with supply disruptions increasingly becoming the primary driver of price movements rather than demand growth.
The World Bank concluded that unless geopolitical tensions ease and additional supply capacity comes online as expected, volatility in natural gas prices is likely to remain a defining feature of global energy markets over the medium term.
