Gulf tensions aggravate Pakistan’s power crisis rooted in structural weaknesses and poor governance

Pakistan has gone into panic mode, thanks to the imminent power crisis the country faces after Qatar halted LNG production amid the escalating conflict in the Gulf.  The sudden drop in the supply of LNG from Qatar amid the intense conflict in the Gulf is set to aggravate the power crisis in Pakistan, as the energy-stressed country relies heavily on natural gas to fulfil its domestic electricity demand.   

Islamabad government has begun taking contingency measures to meet the LNG shortfall, as it was caught unprepared after tanker movement through the Strait of Hormuz came under attack. Now it is trying to increase domestic production and is seeking supplies from Azerbaijan. However, the demand from other major nations can erode Pakistan’s chances of getting adequate supplies from Azerbaijan.  

Pakistan’s Minister for Energy Ali Perveiz Malik, accepted that the country was staring at an energy crisis, which may lead to economic fallout. “We must prepare within our financial capacity — whether it is managing external accounts, maintaining energy reserves or ensuring fiscal stability,” he said.

Pakistan imports LNG from QatarEnergy. If the Strait of Hormuz is blocked, supply chains could be disrupted. The energy market is under stress.” 

Pakistan imported roughly 500 million cubic feet per day (MMcfd) LNG from Qatar to generate electricity, even as total LNG imports stood at 914 MMcfd in 2025.    So even if Pakistan manages to achieve the near-impossible task of extracting 350 MMcfd LNG locally, there will still be a big shortfall. As the summer is set to begin in Pakistan, the increase in energy demand will hurt domestic consumers as well as the industrial sector.

Pakistani nationals have often blamed governance incompetence for the country’s power sector being perpetually crisis-ridden. “Pakistan’s energy crisis isn’t just about blackouts. Policy failures,” said activist named Nashma. “Every day, ordinary Pakistanis feel the impact: higher bills, stalled businesses and economic hardship. Energy insecurity hits education, jobs, & quality of life for millions across the country.” 

A Pakistani national, Ambreen Ali, said the Islamabad government was not prepared to tackle energy supply disruptions. “This is the kind of crisis Pakistan always reacts to late—when oil spikes, LNG tightens, and inflation is already biting,” Ali said.  “The warning signs are right there in the Strait of Hormuz. The question isn’t if pressure builds—it’s whether there’s a plan before markets force one.” 

Usama Saleem, another Pakistani national, questioned Pakistan’s leadership for failing to protect the country from apparent shocks. “Why hasn’t Pakistan built large strategic oil reserves? Every crisis exposes our vulnerability. Energy independence isn’t optional anymore,” Saleem said.  “Why hasn’t Pakistan invested heavily in solar, hydro, and strategic oil reserves? Every global crisis exposes our energy weakness.”  

One Pakistani energy expert said the Gulf crisis exposed the country’s structural energy vulnerabilities. "When choke points like the Strait of Hormuz are threatened, Pakistan has almost no buffer,” the expert said.  Pakistan has been relying more on imports of LNG and other natural fuel resources the domestic production has been on decline and no new discoveries have been made.  Barring hydropower, Pakistan has failed to achieve substantial energy production from solar and wind.   

Moreover, the country’s circular debt in the power sector reached PKR 2.6 trillion in 2025, one of the biggest structural weaknesses. 

Dr Asad Ali Shah, a researcher and entrepreneur, said Pakistan faces a dangerous chain reaction, impacting not just the power sector but its economy too, if the supply chain disruption is prolonged. He said it will cause pressure on foreign exchange due to higher expenses on oil imports, cripple the power sector due to LNG shortage, and cause rupee depreciation and hurt the farm and transport sectors. “The first crisis may not be fuel shortages. It may be macroeconomic instability,” he said.  

Notably, Pakistan does not have strategic reserves nor has it accumulated large amounts of LNG and crude oil. So Pakistan faces both an electricity generation and transport fuel crises, hurting both public services and industrial activities.   The All Pakistan Textile Mills Association (APTMA) said higher energy costs due to the shortage of LNG and crude oil are set to negatively impact the competitiveness of the export sector as well as to widen the current account deficit.