Demand for liquefied natural gas (LNG) in Asia—the world’s largest importing region—remains strong this year, despite a slight decline compared to 2024. The main reason for the slowdown is rising prices, which are now expected to fall, potentially reversing the downward trend in demand.
According to data from Kpler cited by Reuters’ Clyde Russell, Asian LNG imports totaled 112.45 million tons in the first five months of 2025. This is down 6.2% from the same period last year, with most of the drop coming from China, where buyers avoided expensive spot market LNG.
In May, shipments to Asia rose slightly from April but were still below May 2024 levels. Higher LNG prices earlier this year, driven largely by European demand, likely caused the slowdown. Europe’s gas needs surged after a colder-than-usual winter in 2024/25, breaking the assumption that demand would remain steady following two mild winters. This led Europe to divert LNG cargoes from suppliers like Australia and Oman and increase purchases of Russian LNG, despite efforts to reduce reliance on it. Europe and Asia are expected to increase LNG purchases again later this year as they prepare for next winter, though China may be an exception.
China has been building up natural gas reserves since its 2017 gas shortage crisis, which caused power and heating outages after a rapid coal-to-gas switch without securing enough supply. Eight years later, China has comfortable stock levels and has seen a trade dispute with the U.S., causing LNG imports in early 2025 to fall to their lowest in five years. A mild winter also contributed to lower demand.
This trend continued into the second quarter, with Chinese LNG imports in April 2025 down 20% compared to April 2024. This drag on Asia’s total imports has led some to believe LNG demand in the region is steadily declining due to alternative energy sources. However, this is not fully accurate—China remains one of the world’s largest gas importers despite being the biggest investor in wind and solar energy. Its growing renewable capacity coexists with significant LNG imports, which fluctuate seasonally and depend on stockpiling needs.
Europe also shows the resilience of the global gas market. Even as the continent expands its alternative energy sources, it remains highly dependent on gas. This was evident earlier this month when gas prices spiked following a production outage at Norway’s Troll offshore platform.
LNG prices, after falling earlier this year, are now rising again. Spot prices dropped to $11 per million British thermal units (mmBtu) at the start of May but climbed to $12.40 per mmBtu by late May. Supply constraints caused by maintenance at Chevron’s Wheatstone LNG plant and another outage at Freeport LNG in the U.S. contributed to the price rebound.
Demand is expected to increase soon due to the summer peak in energy use across the northern hemisphere and Europe’s annual drive to refill gas storage. Europe will need more gas than in the past two years after stock depletion last winter. Additionally, U.S. political pressure, including calls from former President Trump for increased LNG sales to reduce the EU’s trade surplus with the U.S., may boost demand further.
Currently, Europe’s gas stocks stand at about 47% but will need to rise significantly before winter. Asian LNG imports are also set to rise again. While demand in Asia may appear to be in a temporary lull, the scarcity of viable energy alternatives to gas means this pause is unlikely to last.
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