Consumers in Kenya and other gas-importing countries could face higher energy costs over the next two years as global liquefied natural gas (LNG) supplies remain under pressure, according to the International Energy Agency.
In its latest quarterly gas market report, the IEA says the global outlook has worsened following disruptions caused by the recent conflict between the United States and Iran, which interrupted supply chains and delayed planned expansion of LNG production.
The agency notes that before the conflict, global gas markets were expected to ease as new LNG export facilities came online. However, damage to critical energy infrastructure, including Qatar’s Ras Laffan liquefaction facility—the world’s largest LNG export terminal—and disruptions to shipping through the Strait of Hormuz have significantly altered those projections.
“Markets are expected to remain tighter than previously projected through 2027,” the report states.
The Strait of Hormuz, through which nearly 20 percent of the world’s LNG trade passes, remains a critical route for global energy supplies. Although shipping activity has partially resumed following a temporary ceasefire, LNG exports have yet to return to pre-conflict levels, keeping international markets on edge.
For import-dependent economies such as Kenya, the tightening supply is expected to increase exposure to higher fuel prices and greater volatility in energy markets. Rising LNG costs could also have a ripple effect on electricity generation, manufacturing and other industries that rely on imported energy.
The IEA further projects that global natural gas demand will decline by 0.5 percent in 2026, marking the third annual contraction in seven years. The decline is expected to be driven mainly by reduced gas consumption in power generation and industrial production.
While additional LNG supplies from new projects in North America, Africa and Australia are expected to cushion some of the shortfall, the agency warns that prolonged disruptions could result in the first annual decline in global LNG supply since 2012.
Beyond the energy sector, the report highlights growing concerns over fertilizer production, which depends heavily on natural gas. Any sustained disruption in gas supplies could increase fertilizer costs, potentially driving up food prices and posing fresh risks to global food security, particularly in developing countries.
