Pakistan and Bangladesh are being forced to purchase liquefied natural gas (LNG) at some of the highest prices in years due to supply disruptions stemming from Middle East conflict. Pakistan LNG Ltd. secured a shipment for late July at approximately $21.88 per million British thermal units, a price not seen since 2022. Bangladesh's state-run buyer also procured elevated August shipments.

The prolonged disruption in the Strait of Hormuz, a critical route for global LNG, has driven up spot prices and exacerbated an energy crisis in South Asia. Both nations are experiencing rolling blackouts after their primary supplier, Qatar, canceled deliveries following an incident involving Iran. These emergency purchases are costing roughly double the price of long-term contracts.

The elevated costs are straining government finances, potentially leading to tariff increases and accelerating efforts to reduce reliance on imported LNG. Bangladesh is increasing its investment in renewable energy, with tax exemptions for the solar sector through 2035 and a goal of 10 gigawatts of installed solar capacity by 2030. Pakistan is turning to nuclear, coal, and renewables to compensate for the LNG shortfall.