Islamabad, Pakistan – Initially of this 12 months, Pakistan had extra imported liquefied pure gasoline (LNG) than it may use. Demand had been falling for 3 straight years, from a peak of 8.2 million tonnes in 2021 to six.1 million tonnes by late 2025, as low-cost photo voltaic panels flooded the market and factories reduce.
The federal government quietly offered extra gasoline shipments to different nations and shut down home gasoline wells to stop pipelines from bursting beneath the strain of oversupply. Gasoline that might not be diverted can be pushed into family networks at a monetary loss, including billions to an already crippling debt pile within the vitality sector.
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Then the battle got here. On February 28, the US and Israel launched a whole bunch of strikes in opposition to Iran in an operation named Epic Fury. The strikes focused Iranian missiles, air defences, navy infrastructure and management. Supreme Chief Ali Khamenei was killed within the opening assault.
Iran retaliated by firing a whole bunch of missiles and drones throughout the area, and because of this, site visitors passing the Strait of Hormuz, the slim waterway by means of which roughly a fifth of the world’s oil and gasoline passes, nearly got here to a halt.
The vitality penalties have been rapid. As part of its retaliation in opposition to US-Israeli assaults, on March 2, Iranian drones hit Qatar’s gasoline services at Ras Laffan Industrial Metropolis, the world’s largest LNG export advanced.
Qatar, the world’s second-largest LNG exporter after the US, halted all manufacturing and declared pressure majeure, a authorized time period that means it was launched from supply obligations as a consequence of circumstances past its management.
The battle escalated additional on March 18, when Israel struck Iran’s South Pars gasoline subject, the biggest on the earth, off Iran’s southern coast.
South Pars and Qatar’s North Area sit above the identical underground reservoir, that means the assault threatened each nations’ gasoline manufacturing concurrently. Iran struck Ras Laffan once more in retaliation.
QatarEnergy stated that the hit had pressured it to chop LNG manufacturing by 17 p.c, with repairs anticipated to take as much as 5 years.
Brent crude, the business benchmark, was priced at greater than $109 a barrel on Thursday,
Oil costs on Thursday climbed to $109 a barrel, whereas European gasoline costs jumped 6 p.c in a single buying and selling session.
For Pakistan, which secures almost all its imported gasoline from Qatar and the United Arab Emirates, and holds no emergency reserves, the shift from surplus to scarcity occurred nearly in a single day.
A system constructed on imports
Pakistan meets its day by day gasoline wants from three important sources. The majority, about 2,700 million cubic toes per day, comes from home gasoline fields which were in sluggish decline for years.
The remainder comes from imported LNG, equipped by Qatar beneath long-term contracts, including roughly 600 million cubic toes per day when shipments movement usually.
The third supply is bottled LPG, used primarily by households in rural areas not linked to the pipeline community. Pakistan will get greater than 60 p.c of its LPG from Iran, a provide additionally disrupted by the battle.
Pakistan started importing LNG in 2015 when home manufacturing may not meet demand. Right this moment, imported LNG powers roughly 1 / 4 of the nation’s electrical energy, with the ability sector its largest shopper.
Qatar and the UAE collectively account for 99 p.c of Pakistan’s LNG imports, in response to vitality analytics agency Kpler.
Of that, Pakistan’s LNG provide is dominated by two long-term government-to-government agreements with Qatar, one spanning 15 years and the opposite 10. Collectively, they cowl 9 shipments a month.
From glut to shortage
Month-to-month cargo knowledge from Pakistan’s vitality regulator, OGRA, displays the impression of the battle. The nation obtained between eight and 12 LNG shipments a month by means of 2025 and into early 2026, with 12 arriving in January alone. In March, the month the battle started, solely two shipments arrived.
Costs have been affected too. In accordance with knowledge compiled by researcher Manzoor Ahmed of the Coverage Analysis Institute for Equitable Improvement (PRIED), on February 13, state-owned entities Pakistan State Oil and Pakistan LNG Restricted procured eight mixed cargoes at a mean value of $10.47 per MMBtu, totalling $257.1m.
MMBtu is the usual worldwide unit used to measure and worth pure gasoline and LNG.
By March 12, the 2 cargoes that did arrive value $12.49 per MMBtu, a 19 p.c improve in a month, reflecting tightening world situations even earlier than the battle’s full impression.
Pakistan had already been consuming much less gasoline. Its share of Asian LNG markets fell from roughly 30 p.c in 2020 to about 18 p.c in 2025, pushed largely by the speedy enlargement of solar energy. Thousands and thousands of Pakistanis, pissed off by excessive electrical energy prices and frequent blackouts, have put in rooftop panels in recent times.
By 2025, the nation had 34 gigawatts of photo voltaic capability, with an estimated 25 gigawatts feeding into the nationwide grid. Total electrical energy demand from the grid fell almost 11 p.c between 2022 and 2025.
Gasoline-fired energy crops constructed to run on imported LNG have been left underutilised, particularly throughout daytime.
“In fact, solarisation helps handle daytime demand, decreasing the necessity for operating thermal energy crops,” stated Haneea Isaad, an vitality analyst on the Institute for Vitality Economics and Monetary Evaluation (IEEFA), who has tracked Pakistan’s gasoline sector for years.
However the contracts with abroad gasoline suppliers nonetheless wanted to be adhered to — so Pakistan stored shopping for and paying, she informed Al Jazeera.
Ahmed of PRIED pointed to 2 compounding challenges. First, the character of Pakistan’s gasoline provide contracts have been such that the federal government needed to “purchase LNG even when demand collapsed,” he informed Al Jazeera.
Second, “speedy photo voltaic development and suppressed grid demand have been underestimated, and their impact on general planning was not accounted for,” the Islamabad-based analyst added.
LNG consumption dropped by 1.21 million tonnes in 2025 alone. With no giant storage capability, surplus gasoline was pushed into home pipelines at a loss.
The ensuing round debt within the gasoline sector now stands at 3.3 trillion rupees, roughly $11bn. By January, Islamabad was negotiating to dump 177 undesirable gasoline shipments projected by means of 2031, a legal responsibility of $5.6bn.
Isaad of IEEFA stated the excess was predictable.
“Pakistan’s vitality planning has principally been sure by long-term contracts with little or no flexibility,” she stated. As soon as thought-about essential for vitality safety, these inflexible contracts, she added, have change into a monetary albatross in a market more and more prioritising flexibility and low-cost technology.
She described the federal government’s pre-war response, diverting extra cargoes, as “reactive disaster administration” that prioritised short-term fixes over higher forecasting and procurement flexibility.
Provide shock
Qatar’s LNG shipments to Pakistan have stopped nearly fully since March 2. Of the eight shipments scheduled that month, solely two arrived. The six anticipated in April are unlikely to achieve the nation.
At a public listening to of the Nationwide Electrical Energy Regulatory Authority, Central Energy Buying Company chief government Rehan Akhtar stated LNG provides have been beneath pressure majeure, although coal imports from South Africa and Indonesia remained unaffected.
Officers have warned of near-zero LNG availability within the coming months, even when the battle ends rapidly. LNG accounts for greater than 21 p.c of Pakistan’s energy technology.
“With Pakistan’s LNG provide fully halted after Qatar’s declaration of pressure majeure, LNG crops are successfully out of the operating order,” Isaad stated.
The federal government has responded by restoring home gasoline manufacturing that had been intentionally curtailed in the course of the surplus interval.
Isaad stated Pakistan had been holding again roughly 350 to 400 million cubic toes per day of home gasoline to accommodate LNG imports.
“There may even be the choice to depend on different energy technology sources equivalent to imported coal and hydropower,” she added. However, she warned, “even with hydropower, imported coal and restored home gasoline manufacturing masking a number of the gaps left by LNG, there would possibly nonetheless be an vitality scarcity.”
For now, gentle climate and elevated photo voltaic output have offered non permanent aid.
“To this point, Pakistan has by some means miraculously survived any extended vitality shortages within the energy sector by means of a mixture of gentle climate and a pre-existing lowered reliance on imported LNG,” Isaad stated. “However peak summer season months could also be a distinct story.”
Summer time strain
With an vitality disaster looming, Pakistan is bracing for a couple of hours of day by day deliberate energy cuts this summer season, alongside different vitality conservation measures and better electrical energy prices.
In accordance with the Nationwide Electrical Energy Regulatory Authority’s State of Trade Report 2025, peak electrical energy demand final summer season exceeded 33,000 megawatts.
Winter demand at the moment stands at about 15,000 megawatts, partly as a result of photo voltaic panels now generate between 9,000 and 10,000 megawatts day by day, decreasing reliance on the grid.
Furnace oil, the principle backup gasoline, now prices 35 rupees per unit, about $0.12, and its worth has greater than doubled for the reason that Strait of Hormuz disruption.
Analysts say the burden will fall inconsistently. Customers reliant on grid electrical energy will face each larger payments and outages, whereas industries depending on gasoline will see manufacturing disruptions. These with rooftop photo voltaic and battery storage might be greatest insulated.
Isaad is blunt concerning the choices earlier than Pakistan. “Returning to the spot market won’t be possible, given the dire monetary penalties,” she stated. “Even when it does, competitors with wealthier nations could as soon as once more worth Pakistan out. Furnace oil could possibly be an alternative choice, however that might be prohibitively costly to run.
“The one possibility the federal government could also be left with is load-shedding [planned power blackouts], most likely round two to 3 hours day by day.”
