On February 28, the United States and Israel launched attacks on Iran. In response, Iran attacked American military bases in neighboring countries and Israel. The attacks also targeted the fuel and energy sector. 

On March 2, Qatar’s state-owned energy company, QatarEnergy, announced that it was suspending the production of liquefied natural gas at all of its facilities due to drone attacks on its facilities. At the same time, the American oil and gas company Chevron reported that it had received an order from the Israeli Ministry of Energy to suspend production at the country’s largest gas field, Leviathan. The authorities of Egypt reported about the termination of import of gas from Israel. The quotations of gas at the exchanges sharply grew.

On March 9, the QatarEnergy declared that because of the conflict in the Middle East it is forced to postpone for 2027 commissioning of new objects for expansion of production and liquefaction of gas in east part of the Northern field. On March 18 Israel struck the Iranian gas field South Pars, and Iran in reply attacked gas infrastructure in Qatar and the UAE. Attacks of Iran on an industrial complex in Qatar Ras Laffana led to «serious damages», among affected objects infrastructure of the LNG plant. QatarEnergy CEO Saad al-Kaabi said that facilities accounting for about 17% of Qatar’s LNG exports have been damaged. It will take three to five years to restore them. The company’s annual losses due to the damage could reach up to 20 billion dollars.

The Financial Times newspaper reported on March 22 that all tankers with Qatar LNG loaded prior to armed conflict in the Middle East will arrive in ports of destination within 10 days: one of them goes to Asia, six more to terminals in Europe. Buyers of Qatar LNG quickly take measures for avoidance of deficiency: look for alternative sources of deliveries and switch to other energy resources. In especially vulnerable state there was Pakistan which 99% of import of LNG were a share of Qatar. The authorities of the country requested from the Italian ENI an opportunity to deliver a part from 11 parties which delivery earlier Pakistan refused because of insufficient demand for gas in domestic market. However the Italian company refused. The prices in the spot market turned out too high for Pakistan therefore power plants are transferred to oil products.

On March 23, Kpler reported that the average daily global LNG export over the past 10 days had dropped to its lowest level in six months, at 1.1 million tons. This was a decrease of approximately 20%. The main reason for this was the halt in production in Qatar and the United Arab Emirates.

Attacks of Iran on the vessels trying to pass through the Strait of Hormuz led to its actual blocking that sharply reduced the offer in the world market of oil, gas and products of their processing and also fertilizers, a number of metals, helium and other products. As a result the world faced increase in prices in different segments. If this trend proceeds, then the world economy will inevitably plunge into crisis and global recession.

If to speak about the interests of our country, then it is worth emphasizing that Iran did not impose sanctions against Russia. Our countries implemented partner projects and were going to develop cooperation. On the other hand, the increase in prices for many goods exported by Russian companies is beneficial for both them and the state budget. In the conditions of the shortage of products in the world markets it is possible to expect that buyers will pay less attention to sanctions against the Russian goods and will begin to bypass them. So far the European politicians continue to say that they are not going to refuse import of the Russian products. It is difficult to politicians to recognize the mistakes. They prefer to shift fault to others. It is characteristic that the German chancellor Friedrich Mertz told recently that the refusal of Germany of nuclear power was a mistake. It was easy for him to admit this. After all, he hadn’t made the decision. At the same time the popularity of Alternative for Germany opposition party which supports restoration of cooperation with Russia grows in Germany.

The current German and EU authorities need to find a way to avoid admitting their mistakes while simultaneously correcting them. This option is available for natural gas supplies. With gas storage facilities depleted and difficulties in obtaining liquefied natural gas (LNG), German and EU leaders may consider a possibility of starting gas supplies through the remaining Nord Stream-2 pipeline. Here, we could replicate the oil scheme, where Kazakh oil flows through Russian oil pipelines to Germany. Gas from the Karachaganak field is supplied to Russia for processing at the Orenburg Gas Processing Plant. On Nord Stream-2 it is possible to begin supply of Karachaganak gas from Kazakhstan especially as among shareholders of Karachaganak there are companies: Shell (29.25%), Eni (29.25%) and Chevron (18%). Further supply of the Kazakhstan gas through Russia can be increased at the expense of other fields by means of swap exchanges by the Russian gas.

The problem with delivery of LNG from Qatar will inevitably increase interest in pipeline supply of natural gas. A gas pipeline rigidly connects a supplier and a consumer, but an LNG tanker can always go to another buyer who offers a higher price. It is possible to expect the fast conclusion of the final contract on construction of the Force of Siberia-2 gas pipeline for delivery of 50 billion cubic meters of the Russian gas to China.
Now our country ranks third in the world on the helium output after the USA and Qatar. Supply of helium from Qatar stopped, and this gas is necessary for a set of hi-tech productions. Russia is capable to increase quickly production of helium on the Amur GPP which works far not at full capacity. No other country in the world has such an opportunity.

In the conclusion it is worth emphasizing that the global economic crisis will hit all countries hard and will destroy many markets which will be long restored then. We can only hope that there will be more common sense in international relations in the future. Let’s address once again the book by Christopher Blattman. Here’s what he wrote about how to maintain peace: «People will give the state more power if they trust it. Trust comes from understanding that the state has limitations and can be controlled. This is a fundamental correlation between strengthening the center and increasing its accountability. It means that maintaining power and striving for peace and stability involves a paradox: you must responsibly wield your influence while also seeking to distribute it.»

Europe

On March 19, Bloomberg published an analyst’s forecast that gas prices in Europe could exceed 90 Euros per megawatt-hour ($1,000 per thousand cubic meters) during the winter due to reduced supply caused by damage to the gas infrastructure in the Gulf countries caused by ongoing hostilities.

The German Association of Gas Storage Operators (INES) warned in March that the filling of gas storage facilities in preparation for the 2026-2027 winter season is at great risk, as there are currently no economic incentives for gas storage. From a technical standpoint, it is possible to fill German gas storage facilities to last year’s levels, but the current increase in gas prices makes this operation economically unprofitable. INES considers necessary that the government took the responsibility for creation of regulation for filling of storages. Besides, INES suggested creating a strategic reserve of gas in the amount of about 8 billion cubic meters that will allow compensating external shocks within about 90 days.

In March, the European Commission presented the «Package of Measures for Citizens in the Energy Sector». It has to help inhabitants of the EU to lower accounts for energy, to reduce power poverty and to help to switching to «clean» power sources. Dan Jorgensen, a member of the European Commission responsible for energy issues, noted that one in ten Europeans cannot afford to heat their homes adequately during the winter, and an increasing number of people cannot afford to use air conditioning during the summer. More than 30 million Europeans have problems with payment of bills for utilities in time. Now taxes form to a quarter of cost of the electric power for consumers. The EC asks the authorities of EU Member States to reduce these taxes for households. Measures also provide big transparency in pricing for energy resources and also simpler, than now, a way of change of service provider.

Besides, the parties entering into the coalition ruling in Germany agreed to repeal the law of the previous government on the ban of installation in houses of gas and black oil coppers which caused a set of a controversy and to allow house owners to continue installing heating systems on liquid and gas fuel. Cancellation of the rules approved by Green Party in 2023 was election pledge of the conservative chancellor Friedrich Mertz in a last year’s campaign and became result of long disputes with his partners in the coalition from Social Democratic Party. According to new plans, heating systems on gas and fuel oil have to be operated with the increasing share of environmentally friendly fuel, such as biomethane. This share has to make not less than 10% by 2029 and increase three times by 2040.

The German company Siemens Energy reported that in the first quarter the volume of orders for production of gas turbines and the equipment for power plants grew more than by a third and reached record 17.6 billion Euros. Siemens plans to invest 1 billion dollars in expansion of production of gas turbines and the equipment for power supply networks in the USA. This country accounted for 40% of the order book in the first quarter.

Forecasts

Lorenzo Simonelli, CEO of Baker Hughes, said that global gas demand will increase by 20% by 2040. At the same time, increased supply will curb commodity price increases, and gas generation will help meet demand from data centers. Baker Hughes views gas not as a «transitional» fuel to renewable energy, but as a «destination» fuel that will provide reliable and affordable energy for decades to come.

In turn Shell in the middle of March published the document in which predicts growth of global demand for LNG by 54–68% by 2040 and for 45–85% by 2050 thanks to increase in consumption in Asia. The expected demand range in 2050 is 610–780 million tons per year. The company plans to increase also own sales of LNG by 4–5% a year. According to forecasts of Shell, global consumption of gas can reach peak in the 2030s and has already reached peak in some regions, such as Europe and Japan, but demand for LNG will grow still, and 70% of gain of demand accounts for Asia.

In February, the U.S. Energy Information Administration released a report stating that U.S. electricity demand would break records in 2026 and 2027, reaching 4.2 billion kWh and 4.3 billion kWh, respectively. Last year, consumption reached a record high of 4.1 billion kWh. The demand will be driven by the artificial intelligence (AI) and cryptocurrency sectors, as well as the electrification of transportation and heating systems.

In addition, due to lower-than-average snowfall levels in Italy and Austria, hydropower generation is expected to decrease by 22% in 2026, marking the lowest level in the last three years. This could lead to increased gas consumption in these countries’ power generation sectors.

In early March, Sinopec’s Institute of Economics and Technology published a forecast that China’s gas demand would increase by 3% in 2026 compared to 2025, reaching 448 billion cubic meters. Consumption of gas in the industry will be 176 billion cubic meters (39% of the general demand), in the housing and commercial sector – 155 billion cubic meters (34.6%), in the sphere of generation of the electric power – 84 billion cubic meters (18.8%). Supply of gas to the market will make 459 billion cubic meters from which 274 billion cubic meters are a gas of own production (growth by 5%), 102.8 billion cubic meters – import of gas in the form of LNG (+8.4%), 82.2 billion cubic meters – import of gas on pipelines (+0.3%). Specialists of the Institute expect that by 2030 demand for gas can be 553 billion cubic meters. The main drivers of growth will become the industrial sector in which demand will be 238 billion cubic meters, generation – 109.5 billion cubic meters, housing and commercial sectors – 173 billion cubic meters. Cumulative rated capacity of gas thermal power plants by 2030 can be 218 GW. Gas production will grow on average for 3.4% a year and by 2030 will make 318 billion cubic meters, import of pipeline gas – 98.5 billion cubic meters, LNG – 136.5 billion cubic meters.

This forecast in general corresponds to the forecasts of the Institute published earlier by China National Petroleum Corporation (CNPC) by which calculations of experts, by 2030 demand for gas in China will be 550 billion cubic meters. At the same time CNPC predicts growth of production to the level of 290 billion cubic meters, and the volume of import of LNG to 150 billion cubic meters. Gas generation is considered by experts from Sinopec and CNPC to be one of the key drivers of demand. This is due to the fact that at the end of 2024, China adopted a new policy on the use of natural gas, which removed the previously existing restrictions on the development of gas use in this area. It is considered that gas generation can become a tool for smoothing of peak load of power networks in process of increase in a share of RES in generation. According to long-term forecasts of CNPC, by 2060 the volume of rated capacities of gas generation can grow from current 166 to 500 GW.

India and Bangladesh

The Indian Ministry of Petroleum and Natural Gas reported that Indian companies increased their LNG imports by 15.3% in January 2025 compared to January 2025, to 2.808 bcm. The country’s own gas production during this period was 2.912 bcm, down 5% y-o-y. Gas consumption in India increased by 4.1% y-o-y in January and reached 5.684 bcm.

However, on March 10, it was reported that the Indian authorities were forced to introduce regulations on gas supplies due to disruptions in LNG supplies from Qatar and the UAE. Priority areas include gas supplies to residential consumers, gas usage in transportation, the tea industry, and fertilizer production.

On March 12, it was reported that Bangladesh was forced to purchase three spot LNG shipments at a price of $20.76 to $28.23 per million BTU ($692 to $942.5 per thousand cubic meters) due to a disruption in supplies from Qatar. The energy crisis led to serious consequences within the country: the authorities entered fuel rationing, restricted diesel sales and even temporarily closed the universities to reduce energy consumption. The deficiency of gas forced to stop four state plants on production of fertilizers to keep fuel for power industry.