The last shipments of liquefied natural gas from the Persian Gulf are nearing Asian and European ports, revealing a sharp supply cliff. Natural gas prices have doubled, leaving highly dependent nations like Pakistan facing potential supply cuts.

Following Iran's blockade of the Strait of Hormuz and missile attacks on Qatar's largest LNG facilities, the global LNG supply structure has suffered a severe impact. Analysis from independent shipbroker Affinity indicates that Persian Gulf LNG cargoes already en route before the conflict will arrive within the next ten days. After that, some importers will lose all supply from the region.

Markets have reacted swiftly. The Asian LNG benchmark Platts JKM has doubled since the conflict began, reaching approximately $23 per million British thermal units. Shipping costs have also surged due to higher charter rates and longer alternative routes. Qatar's Energy Minister Saad Al-Kaabi stated this week that due to the attacks, 17% of Qatar's LNG production capacity will remain offline for three to five years, and force majeure may be declared on some long-term contracts.

This situation forces global importers to make difficult choices among competing for alternative supplies like those from the United States, switching fuels, and implementing demand rationing. Many energy-poor Asian nations have already begun energy-saving measures, with some even adopting four-day workweeks.

**Supply Cliff Approaches as Final Cargoes Near Delivery**

According to vessel tracking data, a few LNG cargoes from the Persian Gulf are still scheduled to arrive in Asia—a region that typically absorbs about 90% of the area's LNG exports. Another six cargoes are en route to Europe. Once these deliveries are completed, supply from the Persian Gulf will be entirely cut off.

Qatar produces roughly one-fifth of the world's LNG. Exports were halted after the Strait of Hormuz blockade. This week, Qatar's Ras Laffan LNG plant, which accounts for the majority of the country's production capacity, suffered further missile attacks from Iran. Al-Kaabi noted that this damage will cause long-term impairment to the nation's LNG capacity and explicitly stated that force majeure would be declared on some long-term contracts, potentially for up to five years. This indicates a structural supply gap in the global LNG market lasting years, not months.

**Pakistan Faces Deepest Crisis, Potential End-of-Month Cutoff**

Among affected nations, Pakistan is the most vulnerable. Last year, approximately 99% of its LNG imports came from Qatar. The final shipments from Ras Laffan arrived on the second and third days after Iran initiated hostilities.

Currently, throughput at Pakistan's two LNG import terminals has dropped to one-sixth of normal levels. According to two informed sources, the terminals will completely cease gas distribution by the end of the month. Iqbal Ahmed, Chairman and CEO of Pakistan GasPort, which operates one terminal, stated that the terminal will exhaust its processable LNG inventory within days. "After that, we will be completely cut off," he said, "We do not know when the next shipment will arrive."

Ahmed predicts that if the conflict persists, Pakistan will significantly shift to more expensive and polluting fuel oil for power generation. "I foresee a very difficult year, followed by two to three tough years," he said. Bangladesh faces a similar situation but is slightly better off due to some LNG originating outside the Persian Gulf. The local government has initiated gas rationing measures, including closing universities.

Although Japan is the world's second-largest LNG importer, only about 6% of its supply transits the Strait of Hormuz, making its exposure relatively low. One Japanese LNG trader said, "Our plan is to procure from the JKM spot market to cover the shortfall." However, another trader revealed that Japanese buyers are largely adopting a wait-and-see approach and plan to return to coal, with "only a few buyers considering spot purchases." Japan also plans to expand coal and nuclear power usage, having partially restarted the world's largest nuclear power plant in Niigata Prefecture this past January.

**Supply Tightness May Last Years, Structural Market Pressure**

Until more vessels are permitted passage through the Strait of Hormuz, global LNG market supply will remain tight. Even if the strait reopens, approximately 17% of Qatar's LNG capacity will be unavailable for three to five years due to damage at the Ras Laffan facilities, keeping supply below pre-conflict levels for an extended period.

The force majeure clauses announced by Qatar's Energy Minister Al-Kaabi mean that buyers holding Qatari long-term contracts worldwide will have to rely on the spot market to fill the gap long-term. With the Asian JKM spot price already double its pre-conflict level, energy cost pressures on importers are further heightened. For developing nations with fragile finances, the conflict between high spot prices and limited foreign exchange reserves will be a core energy security challenge for years to come.