Iran War Turns Pakistan’s LNG Surplus Into Looming Energy Crisis

Pakistan is facing a potential energy crisis as its earlier surplus of liquefied natural gas (LNG) rapidly turns into a looming shortage amid escalating tensions linked to the conflict involving Iran.

At the beginning of the year, Pakistan had excess LNG supplies due to declining domestic demand. Consumption had been falling steadily for several years, dropping from a peak of 8.2 million tonnes in 2021 to approximately 6.1 million tonnes by the end of 2025.

The decline was largely driven by structural changes in the energy market. The increasing availability of low-cost solar panels reduced reliance on gas-powered electricity, while industrial activity slowed, further cutting fuel consumption.

To manage the oversupply, authorities took several steps, including exporting surplus LNG shipments to international buyers and shutting down certain domestic gas wells to avoid excessive pressure on pipeline infrastructure. In some cases, excess gas was redirected into residential networks, even at a financial loss.

However, the situation has shifted dramatically in recent weeks. Regional instability and disruptions to global energy supply chains—exacerbated by geopolitical tensions—have tightened LNG availability, leaving Pakistan vulnerable to supply shocks.

The earlier strategy of offloading surplus gas has now complicated the country’s ability to secure adequate supplies, raising concerns about shortages in the coming months, especially during peak demand periods.

Energy experts warn that Pakistan’s already strained power sector could face further financial stress, as rising global LNG prices and supply uncertainties add pressure to an existing debt burden.

As the regional conflict continues to impact energy markets, Pakistan may be forced to seek emergency measures to stabilize supply and avoid widespread disruptions to households and industry.