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Now, the screw is turning on the global gas exporters. The price of natural gas in Asia is tumbling; European demand is shrinking and America is floating on a bubble of methane. Natural gas is following oil in a downward spiral and the leading suppliers in Russia and the Middle East who once struggled to meet demand now find themselves fighting for customers.

The runes are not good for would-be exporters of Canadian liquefied natural gas to the Far East. Argus, the energy price reporting agency, sees new LNG projects capable of delivering an additional 48 million tonnes a year into the Pacific Basin starting operations in 2015. There is already excess supply and the Argus North East Asia LNG price fell to new lows in 2014. LNG for delivery in March 2015 is selling at $10 (U.S.) per million BTU (British thermal units), compared with as much as $16 in 2013. According to a Reuters survey, prices could fall by 30 per cent this year as Japan begins to bring back more of the nuclear power facilities taken off-line following the 2011 earthquake.

The tumbling crude price is putting pressure on natural gas in two ways: it creates competition among power generators which can switch from gas to oil-based fuels and, more importantly, most long-term natural gas contracts are based on price indexes that are linked to oil. When the crude price falls, an LNG or gas pipeline supplier finds his revenue shrinking six months later.

As if Russia had not enough headaches, Gazprom, the country's monopoly natural gas exporter, is expected to suffer massively from oil-indexed gas contracts when the collapse in the price of Brent crude last year is factored into supply contracts in April.

But that is not where the problems end, because the emerging LNG glut in Asia is finding an escape route into Europe. Typically, LNG struggles to compete with natural gas produced in the North Sea or piped from Russia and producers in the Persian Gulf prefer to supply hungry Asian power stations. However, Europe is consuming less natural gas. Eurogas, a utility lobby group, has estimated a 9-per-cent fall in European gas consumption in 2014, the fourth year of consecutive decline. Weak economies are part of the issue but so is the changing technological and political landscape. The aggressive push for renewables, notably in Germany, is reducing demand for fossil fuels such as natural gas, and European industry is becoming more energy efficient, says Eurogas.

According to Bloomberg, Gazprom's exports to Europe last year fell to their lowest level in a decade, a decline of 10 per cent in volume from 2013. The decline is striking as it far exceeds the 1.5-per-cent decline suffered by Norway, a major competitor, and it suggests that the political push from Brussels to reduce dependence on Russia is being taken seriously by the EU's gas-importing nations.

Such a loss of volume will be reflected in big declines in income for a business that accounts for more than a 10th of Russian export revenues. However, there is no instant remedy for Gazprom; the company is targeting natural gas customers in China and other Far Eastern markets but the LNG glut has ended the Asian price premium. Gazprom's only solution is to compete aggressively with rival suppliers and hang on to its market share.

Markets are being turned topsy-turvy and LNG cargoes once destined for Japan and South Korea are now finding their way into the Atlantic Basin, taking their chance on European spot gas markets. Analysts at Bank of America are now expecting a multiyear bear market for LNG as localized, protected regional gas markets are transformed into global markets with LNG cargoes hunting down customers wherever they can.

Natural gas is becoming the new oil: a market under huge pressure from oversupply and weak demand in which the major exporter, Russia, is forced into a ruinous price war to save its market share.