Increased market flexibility helped the global gas industry withstand the 2021–22 energy crisis and, more recently, the disruptions caused by the blockade of the Strait of Hormuz, the International Gas Union (IGU) said in its latest wholesale gas price survey report.
Gas supply continues shifting to more market-based rather than regulated prices, with the former accounting for 72% of volumes in 2025, after mostly steady growth since 62% two decades ago. However, momentum slowed in the 2020s, which the IGU attributed to disruptions caused by the Russia-Ukraine conflict.
The same period has seen an expansion in the share of gas-on-gas (GOG) pricing—where prices are driven by competition between different gas suppliers and at trading hubs, rather than indexed to oil. GOG pricing reached more than 49% of total consumption last year, roughly in line with the level in 2024 but up from 31.5% in 2005.
“The continued importance of open, well-functioning natural gas markets in supporting energy security and meeting rising global energy demand is indisputable” Ydreos, IGU
While the share of GOG pricing in pipeline sales has seen moderate decline in the last decade, its share in LNG sales has continued to grow, reaching 52% of trade in 2025, up from only 14% in 2005. The IGU said there may be a further shift towards GOG pricing in the LNG market in the years to come, given significant growth in US LNG exports. Growth in pipeline trade and domestic production would require liberalisation of key markets, which seems less likely.
Likewise, a greater transition to market pricing could be difficult, given the prevalence of regulated markets in the former Soviet Union, the Middle East and North Africa, which have access to abundant domestic gas supply.
Greater response
Greater market and GOG pricing has made gas supply more responsive to price signals, especially during crises, leading volumes to go to where they are most needed. The IGU also pointed to the substantial investments in LNG infrastructure, supply diversification and flexible trading that have helped contain the latest surge in gas prices as a result of the US-Iran conflict, which has disrupted around a fifth of global LNG supply.
“With gas consumption growing by 50% since 2005, and the global LNG trade tripling over the same period, the continued importance of open, well-functioning natural gas markets in supporting energy security and meeting rising global energy demand is indisputable,” IGU Secretary General Mel Ydreos said in a statement.
Price responses to the Hormuz blockade have been more limited than the supply shock caused by the Russia-Ukraine conflict. However, a protracted war could cause long-term demand destruction, particularly in gas-intensive industries.
Beyond geopolitical volatility, the IGU also noted regulatory and policy decisions that could pose risks to markets. It referred to the methane emissions regulation and the Corporate Sustainability and Due Diligence Directive that the EU is introducing, which have been criticised by exporting countries such as the US and Qatar.
Oil indexation, or oil price escalation (OPE) pricing, led to the highest prices in 2025, at $8.81/m Btu, compared with GOG prices at just $5.57/m Btu. Excluding lower-priced markets of North America and Russia, however, GOG prices came to $10.61/m Btu.
Regional differences
Regionally, wholesale prices were highest last year in Europe, at $12.24/m Btu. There GOG covers 84% of consumption and OPE only 18%. Europe has seen the most radical transformation in pricing over the past two decades. Back in 2005, GOG accounted for only 15% and OPE 78%, reflecting a shift to more spot gas imports and hub-based contracts, declining domestic production and a surge in LNG imports.
Asia and Asia-Pacific prices came to $9.03/m Btu and $8.54/m Btu respectively in 2025. OPE dominates in both markets. In Asia it accounts for 73% of the total, primarily linked to domestic production and imports in China, India and Pakistan. The share of GOG is just 14%.
OPE was only 35% in 2005 but expanded its share at the expense of regulated pricing. This was driven by changes in the pricing of Qatari LNG contracts and the start of oil-indexed pipeline supplies from Turkmenistan to China in the early 2010s.
In Asia-Pacific, OPE covers 58% and GOG 29%, with the region undergoing limited changes in pricing formations over the last two decades.
In the former Soviet Union, regulated pricing dominates, leaving GOG with a share of only 36%, and OPEC a minimal 1%. GOG gained ground over the last 20 years as a result of liberalisation in Russia, as independent producers were allowed to compete with national gas giant Gazprom for gas sales to the power sector and industrial users.
Africa is also mostly regulated, with GOG at only 14% and OPE at 5%, with limited change seen over the period. Likewise in the Middle East, GOG sits at just 5% and OPE 4%, with the rest regulated.
GOG leads by far in Oceania, covering more than 80% of consumption, while in Latin America, GOG stands at 39% and OPE at 8%, with the remainder covered by regulated mechanisms.
The highest prices by country in 2025 were seen in Ukraine, Hungary and Taiwan, all exceeding $13/m Btu, while the lowest were in the regulated markets of Venezuela, Libya, Algeria and Turkmenistan.
Global gas prices generally converged over the period as the market became more integrated, up until the 2021–22 energy crisis, which saw European prices gain a premium to those in Asia, while other regions like North America saw limited change. Markets once more converged after the crisis.