While the Middle East crisis rattled oil markets worldwide, Pakistan had been playing a risky game, staying out of the spot LNG market. Now, the country has flipped its stance, rushing into the spot market as strained Qatari exports and wider supply uncertainty begin to bite, even paying above Asia’s spot LNG levels.According to a tender seen by Bloomberg, state-owned energy authority Pakistan LNG issued an “urgent request” for an LNG cargo for delivery between June 30 and July 4 from BP Plc at $16.74 per million British thermal units on Monday, according to traders familiar with the matter. On the same day, Asia’s spot LNG prices were trading in the $15s per million Btu, traders said.The move highlights the growing unpredictability of LNG shipments passing through the Strait of Hormuz, a key route for around one-fifth of global LNG flows.Pakistan’s energy procurement has been under pressure since regional tensions disrupted supplies from Qatar, its main LNG supplier, forcing repeated reliance on spot market purchases in recent months. The strain deepened after a vessel carrying Qatari oil was attacked in the Strait of Hormuz on Saturday, days after a Singapore-flagged container ship was also hit. Following these incidents, ship data suggests Qatar’s LNG exports through the waterway have effectively halted, tightening supply conditions for import-dependent buyers like Pakistan.The Middle East crisis has triggered a broader global energy strain, with countries rushing to secure fuel supplies to shield themselves from a potential supply shock in international markets.However, Pakistan initially took a different approach. While other countries moved quickly to lock in energy supplies, Islamabad held back, skipping urgent LNG purchases and betting that disruptions in the Strait of Hormuz would ease in the near term, allowing cheaper Qatari shipments to resume on schedule. According to Bloomberg, Pakistan LNG Ltd did not award an emergency tender for two LNG cargoes required for May delivery, which closed earlier that month.
Earlier disruptions and high-cost LNG
The latest purchase comes against a backdrop of earlier supply interruptions and rising import costs.A previously cancelled Qatari shipment, disrupted by escalating tensions in the Strait of Hormuz, forced Pakistan LNG Ltd. to turn to emergency spot tenders. In one such deal, LNG was bought at $19.1337 per million British thermal units from BP Plc, the highest price Pakistan has paid since 2022, according to traders.That purchase also marked only the second time Pakistan re-entered the spot LNG market in around two years, after first doing so in April.Pakistan remains heavily dependent on Qatar for LNG imports. However, ongoing disruptions have pushed inbound shipments well below normal levels, even though some cargoes have continued to pass through the Strait of Hormuz under temporary arrangements.Shipping data points to a sharp decline in LNG arrivals compared with previous years, adding strain to an already stretched domestic energy system. The Strait of Hormuz remains central to global energy flows, handling roughly a fifth of the world’s LNG trade.But ongoing instability in the region has repeatedly disrupted energy passage. Even with intermittent ceasefire efforts, renewed clashes have kept shipping routes fragile and uncertain.
Inflation rising alongside energy costs
Rising import costs have added to broader economic pressure in Pakistan.The country’s consumer price index rose 11.7% year-on-year in May, compared with 10.9 per cent in April, marking a two-year high. The increase has been driven in part by higher energy import costs.Public sector employee groups, including the All Government Employees Grand Alliance (AGEGA) Punjab, have also called for relief measures ahead of the Federal Budget 2026-27, citing declining purchasing power.The wider Middle East tensions have continued to weigh on global energy markets, with LNG and oil supplies facing repeated disruptions.For Pakistan, this has translated into irregular shipments, greater reliance on expensive spot cargoes, and sustained pressure on both energy availability and inflation.
