Key facts
- Pakistan is paying record prices for spot LNG due to disruptions.
- A recent spot cargo was secured for up to $21.88 per MMBtu.
- This price is the highest since the Iran war began in February.
- The Strait of Hormuz closures and Qatar supply issues are driving up costs.
- Pakistan is seeking multiple additional LNG cargoes for July and August.
Pakistan is facing record-high prices for liquefied natural gas (LNG) on the spot market due to renewed disruptions at the Strait of Hormuz and issues with its term supplier, Qatar. The country has been forced to seek LNG on the spot market multiple times this month, accepting prices as high as $21.88 per million British thermal units (MMBtu) for a cargo to be delivered on July 27-28.
This price represents the highest Pakistan has paid for an LNG cargo since the Iran war began in February, which has disrupted global LNG flows. The previous record was set just last week at approximately $20.70 per MMBtu. Such high prices for spot LNG were last seen in 2022, following Russia's invasion of Ukraine.
Historically, Pakistan has relied on long-term fixed deals with Qatar for nearly all its LNG. However, the ongoing geopolitical tensions and the halt in traffic through the Strait of Hormuz have severely impacted these supplies. Consequently, Pakistan is actively looking to secure additional spot LNG cargoes for both July and August, with plans to purchase at least one more cargo for July and potentially up to six for August delivery.