OIES – Market and Regulatory Headwinds Build for MENA Gas Exporters

Gas exporters from the MENA region, particularly North Africa and the Gulf Cooperation Council countries, have been important in supplying natural gas to Europe following the decline of Russian pipeline gas imports after the Ukraine crisis in 2022. The surge in gas prices, EU gas demand management, and storage policies led to increased LNG supplies from the US and Qatar, as well as North African pipeline gas suppliers and Azerbaijan, maximizing volumes into Europe. However, European efforts to reduce reliance on natural gas and decarbonize their energy system pose challenges for MENA gas exporters. The declining European gas demand, coupled with new LNG projects in Qatar and the US, will lead to softer gas balances and increased competition for market share on price, volume, and contract flexibility. North African gas exporters face constraints due to rising domestic demand and limited investments, while GCC countries with larger reserves are better positioned to comply with emissions standards. The long-term decline in European gas demand and global surge in LNG projects suggest a challenging outlook for MENA gas exporters to Europe.