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Pakistan Skips Spot LNG Buy, Gambles on Strait Reopening - Bakken Wire
Pipeline & Infrastructure

Pakistan Skips Spot LNG Buy, Gambles on Strait Reopening

Decision highlights global supply risks from Hormuz closure, with implications for energy markets connected to Bakken output.

Bakken Wire Staff·🌅Afternoon Wire·

Pakistan has declined to purchase emergency liquefied natural gas cargoes on the spot market, betting that hostilities closing the Strait of Hormuz will ease and that cheaper contracted supplies from Qatar will soon arrive, according to a report from Rigzone citing Bloomberg.

State-owned Pakistan LNG Ltd. did not award a tender seeking two shipments for May delivery that closed on Thursday, May 7, traders said. The government made the decision with the view that the conflict between the U.S. and Iran was easing and that the country would soon receive two cargoes from Qatar. Pakistan has received only a single LNG shipment since early March, compared to an average of about nine cargoes a month last year. Supplies under its long-term contract with Qatar are currently about half the price of spot market cargoes.

The decision is a risky gamble that could worsen the nation's gas shortfall, which has already resulted in widespread blackouts, Rigzone reported. 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. 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 have clouded the outlook for a peace deal.

For Bakken operators and midstream companies, the situation underscores the fragility of global energy trade routes and their impact on market dynamics. While North Dakota's crude and gas production is primarily landlocked and moves via pipeline and rail, global disruptions in key chokepoints like Hormuz can influence broader commodity prices and trading patterns for hydrocarbons worldwide. The closure has already forced market adjustments, with Pakistan forced to buy a spot cargo for the first time in over two years late last month as contracted deliveries were halted.

The latest tender sought shipments for May 12-14 and May 24, 2026 delivery. Some Pakistani vessels have recently made it through, including a diesel tanker last week. Pakistan's Prime Minister Shehbaz Sharif discussed the conflict and peace efforts with Qatar's Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani on May 7, according to a social media post cited in the report.

The ongoing disruption highlights how geopolitical events far from the Williston Basin can still affect the energy landscape. The reliance on and vulnerability of maritime routes for LNG and oil exports creates price volatility and supply uncertainties that resonate across interconnected markets. Pakistan's choice to avoid high-priced spot LNG reflects a calculation that the premium is not worth paying if the seaway reopens soon, a decision that will be closely watched by global traders for signals on market confidence in a near-term resolution.

Source

Rigzone (citing Bloomberg)

lngglobal marketsstrait of hormuzgeopoliticssupply chainexports

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