Asia, the world’s largest buyer of liquefied natural gas (LNG), has seen strong demand this year, though it has dipped slightly compared to 2024. The main reason is high prices—but those prices may soon rise again, reversing the downward trend.
Between January and May, Asian countries imported 112.45 million tons of LNG, according to Kpler data cited by Reuters’ Clyde Russell. That’s 6.2% less than during the same period last year. Most of the drop came from China, which avoided buying costly LNG from the spot market.
In May, imports across Asia rose slightly from April but were still lower than in May 2024. The cause was likely the same: high prices. LNG became more expensive earlier this year due to strong demand from Europe.
After two mild winters, Europe had expected steady gas use. But the winter of 2024/25 was colder, driving up gas demand and, in turn, global LNG prices. Europe even redirected shipments from Australia and Oman and bought record amounts of Russian LNG—despite efforts to cut such imports.
A similar situation could play out later this year. Both Asia and Europe need to stock up on gas for the next winter. China, however, may be an exception. Since a severe gas shortage in 2017, China has focused on building gas reserves. Its storage levels are now solid, and tensions with the U.S. have further affected its import behavior.
In early 2025, China’s LNG imports fell to a five-year low, helped by a mild winter and large gas reserves. The decline continued into the second quarter, with April imports 20% lower than a year earlier.
This drop has led some to believe Asia’s overall demand is falling due to the rise of alternative energy sources. But China’s case shows that this is not entirely true.
China leads the world in wind and solar power, yet remains one of the largest gas importers. Even with strong growth in renewables, gas continues to play a key role, with weather and storage affecting short-term buying.
Europe tells a similar story. Earlier this month, a production outage at Norway’s Troll field caused a sharp increase in gas prices. Despite growing investment in renewable energy, Europe still relies heavily on gas.
Now, LNG prices are climbing again. After dropping to $11 per million British thermal units (mmBtu) in early May, prices rose to $12.40 per mmBtu by May 23. The increase is tied to supply issues, including maintenance at Chevron’s Wheatstone LNG plant and a new outage at Freeport LNG in the U.S.
Demand is also set to rise. One driver is the seasonal increase in energy use during the northern hemisphere’s summer. Another is Europe’s annual effort to refill its gas storage ahead of winter. Following a harsh winter, Europe will likely need more gas than in the past two years. Stocks are currently about 47% full.
Adding to the pressure is U.S. President Donald Trump, who has called for more LNG sales to Europe to narrow the U.S.-EU trade gap. This could also spur more demand in Asia, where countries are watching energy prices closely.
In short, while Asia’s LNG demand may seem weaker now, the decline is temporary. Few energy sources can match the reliability and scale of gas, ensuring its continued importance in both Asia and Europe.
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