Pakistan is forced to turn to the spot LNG market once again after the re-escalation in the Strait of Hormuz has canceled a cargo from Qatar.
State-controlled Pakistan LNG has just issued a tender to buy an LNG cargo for July 15-16 delivery.
The decision was taken on Wednesday, after the renewed hostilities led to the cancellation of one LNG cargo from Qatar that was supposed to arrive in Pakistan later this month, anonymous traders familiar with the matter told Bloomberg on Thursday.
Pakistan, which has historically received nearly all its LNG from Qatar under long-term fixed deals, has faced problems in procurement since the Iran war began on February 28 and halted traffic through the Strait of Hormuz.
The emergency LNG tender is not the first one Qatar has issued over the past months. Continued disruption of traffic through Hormuz and the latest flare-up have prompted the South Asian nation to go back to seeking spot cargoes.
Last week, Pakistan bought its second spot LNG cargo in as many weeks, in a sign that flows of liquefied gas out of the Persian Gulf have been slow to recover.
As of Thursday, traffic through the Strait of Hormuz ground to a halt, again, after the U.S. and Iran traded strikes for two consecutive days, with the U.S. attacking Iranian targets and Iran targeting Bahrain, Qatar, and Kuwait.
The Pakistani dependence on Middle Eastern LNG created a major gas supply and power crisis in March and April, when no LNG vessels were able to move out of the Persian Gulf through the Strait of Hormuz.
Pakistan has relied on Qatar’s term LNG supply for years, but the war in the Middle East has led to the shutdown of Qatari LNG production and exports.
Without Qatar’s LNG, Pakistan was reeling from an intensifying energy crisis with power outages and fuel rationing.
By Tsvetana Paraskova for Oilprice.com
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