Photo: Asim Hafeez/Bloomberg via Getty Images
The Strait of Hormuz and Qatar’s Ras Laffan liquefied natural gas (LNG) export facility have been effectively shut for over five months due to the war between the United States and Iran, impacting 20 percent of the world’s LNG supply. Pakistan is one of the Asian buyers most impacted to Middle Eastern LNG disruptions, with over 90 percent of their imported LNG coming from Qatar. While it has been mediating between the United States and Iran to settle the current conflict, Pakistan has utilized diplomacy with Iran to procure needed LNG supplies from Qatar; however, this has not been enough to prevent rolling blackouts or impacts on the country’s fertilizer production.
Pakistan could be mediating the conflict between the United States and Iran for prestige and influence, but it also has strong energy, economic, and defense ties to the Middle East and has a vested interest in the conflict ending sooner rather than later. In addition to energy flows, Pakistan also receives remittances from citizens working in the Gulf and has a mutual defense pact with Saudi Arabia. Pakistan shares a border with Iran and instability in Iran is both an economic and security risk for Pakistan. Pakistan could make use of its warming ties with the United States and current diplomatic maneuvering to import U.S. LNG cargoes by negotiating for credit support and energy security aid from U.S. government entities, as the LNG market is likely to only get tighter as winter approaches.
Pakistan is heavily dependent on Qatar for LNG supplies because of its price sensitivity and its inability to substitute LNG for pipeline gas supply due to Afghanistan and the Hindu Kush mountains preventing an international pipeline that could bring Turkmen gas to the subcontinent. Pakistan saw an immediate impact from Ras Laffan’s closure, with its LNG imports in March dropping 68 percent month-on-month and 69 percent year-on-year. In comparison, fellow price-sensitive South Asian buyers India and Bangladesh saw their volumes of imported LNG in March increase by 120 percent month-on-month and 16 percent month-on-month respectively, and they have not experienced dramatic declines in LNG imports this year. India and Bangladesh have turned to the United States for more cargoes, along with supplies from Angola, Mozambique, Nigeria, Oman, and the UAE.
Out of Pakistan’s 8.4 million tonnes per annum signed to active medium- and long-term contracts, 7.5 million tonnes are from Qatari projects. This is due to the low cost of Qatari LNG that comes from lower project and gas supply costs. Pakistan is price-sensitive because it has been recovering from a financial crisis in the years following the Covid-19 pandemic: The country was at risk of sovereign default and saw inflation hit a record high 38 percent in 2023. Its strained finances have resulted in a non-investment-grade credit rating and IMF-enforced austerity measures, which make signing long-term contracts more expensive due to risk premiums added by sellers to protect themselves against the buyer defaulting on the contract.
Pakistan has responded to the wartime increase in LNG prices by dramatically decreasing its LNG imports, changing its power generation mix, and leveraging diplomacy with Iran to secure safe passage for Qatari LNG cargoes through the Strait of Hormuz. Pakistan’s power mix in March and April 2026 saw coal usage rise to around 30 percent and much lower power generation from LNG imports—between 4–6 percent, compared to the five-year average of around 20 percent for both coal and LNG generation. Despite the power generation mix shifting, there have been planned blackouts throughout the country, impacting manufacturing, businesses, and households.
Bangladesh, India, and Pakistan, traditionally thought of as price-sensitive buyers, are now purchasing spot cargoes in the lower $20s per million British thermal units (MMBtu) of LNG, with India recently paying over $23 per MMBtu. Pakistan was reportedly offered a cargo for $17 per MMBtu from TotalEnergies in early July 2026 and bought a cargo for $21.88/MMBtu in mid-July for delivery later in the month. For comparison, spot Asian cargoes in May and June 2025 were between $12 per MMBtu and $13 MMBtu.
Pakistan has been more active on the spot market than previous years, issuing 11 tenders for spot cargoes this year and awarding six so far, compared to two tenders awarded last year. Pakistan has imported cargoes from Mozambique’s Palma terminal, Oman, and Qatar’s Ras Laffan this summer and planned to purchase up to six cargoes for delivery in August. In comparison, India awarded 41 tenders and Bangladesh 32 between March and June of 2026.
Though Pakistan has been able to replace some LNG supplies with coal, and growth in privately-owned solar panels has helped some consumers meet individual power demand, LNG imports are still necessary to produce fertilizer for the country’s agricultural sector. Pakistan has shut two fertilizer plants to redirect gas to the power sector because of tighter LNG supplies, which is expected to impact fertilizer supplies during the summer rice transplanting season and wheat sowing later this year. After QatarEnergy’s force majeure issuance, Pakistan’s Sui Northern Gas Pipelines Limited was forced to issue a force majeure on gas supplies through August 3 due to a lack of gas supplies from Qatar, citing renewed conflict in the Gulf. Agritech confirmed Sui had suspended supplies to its 433k tonnes per year urea plant, forcing operations to a halt. LNG markets will likely become even tighter as winter approaches due to lower global supplies from Ras Laffan’s extended outage and higher demand.
Pakistan may also become more limited in its ability to supplement its power supply with other forms of energy. A strong El Niño weather pattern this autumn is expected to cause hotter, drier weather in the Pacific Basin after a record heat wave in May, which could impact the amount of water available for hydropower production and nuclear reactors and drive regional demand for alternative energy sources such as LNG and coal even higher.
At the same time, securing LNG supplies may become even more competitive. Europe is coming to the end of injection season—when it builds out its natural gas storage before the winter—at similar levels to 2023 after the energy crisis triggered by Russia’s invasion of Ukraine, and it will therefore likely be reentering the spot market and driving up LNG prices in the coming weeks and months. LNG supply will remain low as demand increases: QatarEnergy has extended its force majeure issuance on LNG shipments through September, is reportedly preparing to extend force majeure on shipments into October, and has tellingly leased out some of its LNG tankers through mid-October despite lower freight rates, signaling its own expectations of Ras Laffan’s delayed startup timeline.
An attack in early July on a Qatari LNG tanker attempting to pass through the strait shows Iran’s agnostic viewpoint of its Western-aligned Gulf neighbors and willingness to attack vessels if it has not given approval for their passage. That Qatar’s ability to send cargoes through the strait depends on the end buyer’s negotiating skills and relationship with Iran is not a comforting thought for a country whose wealth, and by extension its foreign influence, hinges on its LNG exports. An estimated 79 percent of Qatar’s state revenues—which have been used to assert independence from Saudi Arabia’s regional leadership, create the Al-Jazeera news network, and build ties with U.S. universities—come from LNG. For a small state, Qatar has built a broad international footprint on the back of its energy exports.
The Strait of Hormuz crisis has created a tangled web of interdependence: Pakistan depends on Qatar for LNG supplies, Qatar depends on Pakistan’s relationship with Iran, and both depend on Iran for safe passage of LNG cargoes. As much of a player as Pakistan has been on the world stage recently, international diplomacy can only do so much to shield it from blackouts, reduced crop yields, and a weak economy if there is no settlement between the United States and Iran that enables the strait’s reopening and the restart of Ras Laffan.
Pakistan has negotiated for the passage of Qatari LNG cargoes but could also work with the Trump administration to procure U.S. cargoes. Given Pakistan’s role in U.S.-Iran negotiations and its improving relations with the United States under the current administration, the United States could facilitate the sale of U.S. LNG cargoes to Pakistan to cover its energy shortfall through the crisis. The United States could provide aid to cover a certain percentage of the cost per cargo and credit support through the Export-Import Bank of the United States for Pakistan to issue a tender for U.S. LNG cargoes. The precedent for providing energy aid through the State Department exists, as the United States has previously pledged energy assistance to Ukraine through the U.S. Agency for International Development. The Trump administration has connections and political capital with U.S. LNG companies that could be used to bolster Pakistan’s energy security, build goodwill, and potentially lay the groundwork for market development in Pakistan by U.S. LNG exporters.
Caroline Russell is an associate fellow in the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.
