Strait of Hormuz Closure Threatens Pakistan's LNG Supplies

Pakistan's LNG imports are under pressure due to the closure of the Strait of Hormuz and its strained finances. The country has been recovering from a financial crisis following the Covid-19 pandemic, which saw inflation hit a record high 38 percent in 2023.

Pakistan relies heavily on Qatari projects for its LNG imports, with 7.5 million tonnes out of 8.4 million tonnes per annum signed to active medium- and long-term contracts. The low cost of Qatari LNG is due to lower project and gas supply costs.

However, Pakistan's strained finances have resulted in a non-investment-grade credit rating and IMF-enforced austerity measures, making it difficult for the country to sign long-term contracts.