Global LNG, Oil Supply Risks Intensify Amid Middle East Conflict

Power generation costs in Pakistan surged by 38% in July from a year earlier as the country paid the highest spot LNG prices in four years, according to OilPrice.com. The cost spike was driven by supply disruptions from the Middle East, forcing Pakistan to procure expensive spot cargoes. In mid-July, state-controlled Pakistan LNG Limited accepted a spot cargo at a price of $21.88 per million British thermal units (MMBtu), the highest paid since the Iran war began in February 2026.

The renewed closure of the Strait of Hormuz and the stranding of cargoes from term supplier Qatar have upended global LNG flows, the report said. Total electricity generation in Pakistan also rose by 7% in July year-over-year, further pushing up costs. The situation highlights the continued fragility of global natural gas supply chains and their direct impact on power prices.

In North Africa, Libya is seeking between $36 billion and $40 billion in foreign investment to expand its oil industry and raise output to 2 million barrels per day by the early 2030s, OilPrice.com reported, citing the National Oil Corporation chairman. The country's parliament recently passed a unified budget including a $2-billion lifeline for the NOC to pursue production growth. Major international firms, including Repsol, Eni, QatarEnergy, BP, Shell, Exxon, and Chevron, are returning to Libya, marking its first major licensing push in 17 years.

Despite this investment push, security remains a concern. The NOC recently had to declare force majeure on an oil export terminal following drone strikes, underscoring the ongoing risks to production in the region.

Security risks escalated further Tuesday as the Iran-aligned Houthi group claimed its third attack on Saudi Aramco's Jazan oil refinery in two weeks, OilPrice.com reported. The 400,000-barrel-per-day refinery was closed at the end of July due to damage from a prior Houthi attack. The group said it targeted the facility with drones in response to violations of Yemeni airspace.

These repeated attacks have forced Saudi Arabia to re-route part of its oil exports from the Red Sea to the Suez Canal and the Egyptian port of Sidi Kerir. The heightened risks have reportedly prompted some Asian refiners to ask Aramco to pick up crude oil cargoes at Sidi Kerir as vessel owners grow reluctant to transit the Bab el-Mandeb Strait.

For Bakken operators and crude marketers, these global developments reinforce the premium placed on secure, stable production from basins like the Williston. Volatility in Middle Eastern supply and shipping routes can influence global oil benchmarks, affecting the price realizations for North Dakota crude. Meanwhile, international investment flowing into competing production regions like Libya highlights the global competition for capital.