Top sector official: Iran war could cause systemic gas demand destruction
Gas Exporting Countries Forum head said that if the conflict continues, the natural gas demand destruction caused by the 'Iran war' will become structural. Kpler data shows that since the Middle East Crisis began in February, over 500 million barrels have been removed from the global market. This is the biggest disruption of energy supply in modern history. The countries that depend on Gulf oil have responded by burning coal, and speeding up the transition to renewables. Philip Mshelbila, secretary general of a group representing a dozen nations holding?70% the world's proven reserves of natural gas, said that such measures were a temporary response to the crisis. If the conflict ended tomorrow, the world would be back to normal in six to twelve months. If it continues for six months, the knee-jerk reactions we're seeing could become permanent," he said. He stated that 2026 was supposed to be a pivotal for the sector as a tight gas market in the world would turn into an oversupply. Mshelbila stated that "clearly this conflict has affected that and it is not clear if it's a mere delay or if in fact the glut will ever arrive." Mshelbila told an audience of African energy ministers that African gas producers missed an opportunity to fill in the gap caused by Middle East outages, and the restricted shipping through Strait of Hormuz. He said that while some African countries have excess capacity for both pipeline and LNG gas, most of them aren't producing at their full capacity. "Look at the pipelines that export gas to Europe from Algeria and?Libya. Not one is full." Mshelbila stated that North American gas producers have instead captured the European and Asian markets. "Normally, in a crisis situation this is a great opportunity to fill it up. Seize the opportunity! "Unfortunately, we're missing out because we don’t have upstream molecules that can fill the infrastructure," said he. The reserves are there but are still underground.
(source: Reuters)
