Pakistan opted not to buy urgent cargoes of liquefied natural gas on the spot market, betting that hostilities which have closed the Strait of Hormuz will ease and cheaper supplies from Qatar will arrive soon.
State-owned Pakistan LNG Ltd. didn’t award an emergency tender seeking two shipments for May delivery that closed Thursday, said traders with knowledge of the matter. The government made the decision with the view that the conflict between the US and Iran was easing, and that the South Asian country would soon receive two cargoes from Qatar, they added.
Pakistan, which is mediating talks between the US and Iran, has only received a single LNG shipment since early March, according to ship-tracking data compiled by Bloomberg. The country imported an average of about nine cargoes a month last year, the data shows. Supplies under its long-term contract with Qatar are currently about half the price of those from the spot market.
Shunning spot shipments is a risky gamble. It could worsen the nation’s gas shortfall, which has resulted in widespread blackouts. Pakistan’s Petroleum Minister Ali Pervaiz Malik didn’t respond to requests for a comment.
The Strait of Hormuz has been virtually impassable since the start of the war in late February, choking off shipments of natural gas, crude and oil products to global markets. Prior to the conflict, about a fifth of global LNG supply transited through the waterway. A ceasefire has been in place since early April, but fresh clashes between the US and Iran has clouded the outlook for a peace deal.
Late last month, Pakistan was forced to purchase a spot cargo for the first time in more than two years as the Middle East conflict halted contracted deliveries. The shipments in the latest tender were for May 12 to 14 and May 24 to 26 delivery. Some Pakistani vessels have made it through Hormuz including a tanker carrying diesel last week.
Pakistan’s Prime Minister Shehbaz Sharif had a call with Qatar’s Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani on May 7 to discuss the conflict and shared commitment to peace efforts, according to a post on X.
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