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RIYADH: The combined gas demand in the Middle East and Africa region is expected to rise by 2 percent in 2025 before accelerating to 3.5 percent in 2026, driven by higher use in the industry and power sector, an analysis showed. 

In its latest report, the International Energy Agency projected that global gas consumption is projected to reach an all-time high in 2026, with demand growth accelerating to around 2 percent, up from the expected 1.3 percent expansion in 2025. 

In April, a report by the World Bank echoed similar views, stating that global gas consumption is expected to be moderate in 2025, before rebounding in 2026, due to high demand in markets such as the Asia Pacific and the Middle East. 

Commenting on the recent report, IEA Director of Energy Markets and Security Keisuke Sadamori said: “The backdrop for global gas markets is shifting as we enter the second half of this year and look toward 2026. The wave of LNG (liquefied natural gas) supply that is set to come online is poised to ease fundamentals and spur additional demand, especially in Asia.” 

Sadamori added that the IEA’s latest projection on gas demand and consumption is subject to unusually high levels of uncertainty over the global macroeconomic outlook and the volatile geopolitical environment. 

Natural gas is a significant source of energy for power generation, industrial processes, and heating. It is widely considered a cleaner-burning fuel than coal or oil as the world continues its energy transition journey.

The IEA further stated that Asia’s gas demand is expected to rise by more than 4 percent in 2026, accounting for around half of the global gas demand growth. 

In North America, natural gas demand is expected to increase by less than 1 percent next year, primarily supported by the power sector. 

The report, however, noted that gas demand in Europe is projected to decline by 2 percent next year, amid strong renewable energy output. 

With global gas consumption expected to reach an all-time high in 2026, usage by industry and the energy sector is forecast to contribute around half of the incremental demand. 

Gas-to-power demand is projected to account for 30 percent of the total demand growth in 2026, while gas use in the residential and commercial sectors is expected to increase by around 1 percent, assuming average weather conditions prevail.

Stable Middle East and energy security

According to the latest IEA report, stable geopolitical conditions in the Middle East region are critical to ensure global energy security. 

“The conflict between Israel and Iran highlighted the energy interdependencies within the Middle East and the region’s crucial role in global oil, natural gas and fertilizer supply security,” said the energy agency. 

It added: “The Middle East accounts for 30 percent of global oil and 18 percent of global gas production, almost 25 percent of LNG supplies and around one-third of global urea exports.” 

According to the study, the crisis in the Middle East region put intense upward pressure on prices, with the Israel-Iran conflict fueling strong price volatility across commodity markets. 

In the cases of natural gas and urea, higher prices were also supported by actual disruptions to production and physical trade flows. 

Due to rising security concerns, Israel shut natural gas production at the Leviathan and Karish fields between June 13 and 15 and halted piped gas exports to Egypt and Jordan, which in turn led to the curtailment of fertilizer production. 

In Iran, attacks damaged a platform at South Pars Phase 14, reducing output by around 12 million cubic meters per day. 

Production in gas fields and trade flows in the Middle East region were gradually restored following a ceasefire between Israel and Iran. 

“The initial increase in prices was largely driven by the fear that an escalation of the conflict could lead to the closure of the Strait of Hormuz — the world’s most critical oil and LNG chokepoint, which is located between Iran and Oman,” said IEA. 

Earlier this month, a report released by Rystad Energy, a research and analysis firm, stated that the Middle East region is on track to surpass Asia and become the world’s second-largest gas producer by 2025, ranking only behind North America. 

According to the analysis, gas production in the Middle East has increased by around 15 percent since 2020, and future growth underscores the determination of regional producers to monetize their gas reserves and develop export potential to meet global demand. 

The analysis added that Iran currently leads the Middle East in gas production, with about 25 billion cubic feet per day, followed by Qatar at 16 bcfd and �������� at eight bcfd. 

LNG supply

According to the latest IEA report, global LNG supply in 2026 is projected to rise by 7 percent or 40 billion cubic meters, as new projects are expected to come online in countries including Qatar and the US. 

Qatar plans to expand its LNG production capacity from 77 million tonnes per annum to 110 mtpa by 2026 and 126 mtpa by 2027, ultimately reaching 142 mtpa by 2030.

In March, global credit rating agency Fitch said that state-owned Qatar Energy’s North Field projects will support both hydrocarbon and non-hydrocarbon growth from 2025 to 2030. 

North Field, which holds nearly 10 percent of the world’s known LNG reserves, lies off the northeast shore of the Qatar peninsula, covering more than 6,000 sq. km — roughly half the country’s land area. 

For the whole of 2025, global LNG supply is expected to increase by 5.5 percent or 30 bcm, primarily supported by the ramp-ups of major new LNG projects in North America.

These projects in North America include the Plaquemines LNG project and the Corpus Christi Stage 3 expansion, as well as LNG Canada.

RIYADH: Kuwait’s economy returned to positive territory in the first quarter of 2025, recording a 1 percent year-on-year increase in real gross domestic product, according to a report from the National Bank of Kuwait. 

The rebound marks the end of seven consecutive quarters of contraction, driven primarily by a gradual recovery in the non-oil sector. 

The bank’s analysis noted that the non-oil economy continued to expand, supported by sustained momentum in manufacturing, real estate, and transportation sectors, while the impact of previous oil production cuts has begun to fade.

In parallel, Kuwait’s oil production began increasing in April, adding 135,000 barrels per day, which is expected to benefit the overall economy in the coming months despite still-muted gains from the oil sector. 

The growth comes as the World Bank and the International Monetary Fund project that the GCC economy will grow by around 3.2–3.5 percent in 2025, supported by the rollback of OPEC+ production cuts and ongoing efforts to diversify the economy, despite global headwinds.

NBK’s analysis stated: “With the negative effects of earlier voluntary oil production cuts beginning to fade, oil GDP recorded only a marginal decline, the softest since Q2 2023.” 

Growth in Kuwait’s non-oil sector slowed to 2 percent year-on-year in the first quarter of 2025, down from 4 percent in the previous quarter, reflecting a moderation in manufacturing activity. 

Meanwhile, the oil sector contracted by 5.7 percent year on year, compared to a 0.3 percent contraction in the same period of 2024.

Average oil output in the first quarter declined to 2.4 million bpd, an annual drop of 0.7 percent.

However, NBK’s report pointed to a likely improvement starting in the second quarter of this year, as Kuwait began unwinding OPEC+ production cuts in April, which could raise output to 2.2 million bpd. 

“Originally planned to be unwound over the course of 18 months, OPEC+ has accelerated the pace of supply hikes with output now on a path to be fully restored in September, a full year ahead of schedule,” the report stated. 

This, combined with ongoing support for non-oil activity and the implementation of key public investment projects, is expected to help stabilize GDP growth. 

Across the Gulf region, the economic performance in the first quarter of 2025 also showed broad strength. 

�������� reported a robust 3.4 percent year‑on‑year rise in GDP, driven by a 4.9 percent expansion in non‑oil activities, while oil output fell slightly by 0.5 percent, according to GASTAT. 

The UAE’s non-hydrocarbon economy continued to drive growth, supporting full-year GDP forecasts of around 4.4 percent, underpinned by steady oil output and surging sectors of services, construction, and trade.

CPI up

Consumer prices in Kuwait rose in June, with the Consumer Price Index increasing by 0.29 percent from the previous month to 136.9. 

On an annual basis, inflation reached 2.32 percent compared with June 2024. The food and beverage group recorded the highest annual increase at 5.11 percent, driven by rising costs across categories including cereals, meat, dairy products, and vegetables. 

Other notable annual increases included clothing and footwear with 3.93 percent, miscellaneous goods and services with 4.80 percent, and health at 2.94 percent. 

Conversely, the transportation group recorded a decline of 1.81 percent year on year.