Arrival of second Qatari LNG tanker a major diplomatic achievement

EDITORIAL: The second Qatari Liquefied Natural Gas (LNG) tanker docked at Port Qasim, Karachi, yesterday, a major diplomatic achievement for Pakistan. Reports suggest very high level Pakistani, Iranian, and Qatari leadership were involved to ensure safe passage of the two tankers, and therefore it is baffling as to why this news item is sourced to a British news agency rather than the Foreign Office sharing it with the local media.

QatarEnergy declared force majeure (that frees parties from liability when extraordinary unforeseeable events occur) to all affected long-term buyers shortly after the US-Israel attack on Iran and the latter’s retaliatory strikes on US-Israeli interests in the region. On 19 March, the company announced damage to Ras Laffan Industrial City from three attacks projecting lost revenue of about 20 billion dollars and estimated repair time of up to five years. The attacks damaged trains 4 (a joint venture with ExxonMobil’s share at 34 percent) and 6 (with ExxonMobil’s share at 30 percent) accounting for 12.8 million tons of production per annum (17 percent of Qatar exports).

It is unclear whether these two tankers were procured at spot rates, which are extremely high, given the ongoing conflict, or whether Qatar agreed to sell LNG at rates agreed under the 2016 deal that priced LNG at 13.37 percent of Brent Crude Oil. It is also unclear whether these two tankers were required to conform to the new governance mechanism stipulated by the Iranian Revolutionary Guards Corps (IRGC) that entails getting mandatory transit permits, electronic compliance via the Persian Gulf State Authority and potential tolls for tankers deemed non-hostile (while disallowing those declared hostile from passing the Strait of Hormuz).

A noted private sector expert maintains that Pakistan will save 22 to 50 million dollars from the two LNG cargoes through lower-cost Qatari LNG arrangements, inclusive of 22 million dollars in import costs per cargo and additional cost related operational expenses However, it is unclear whether this expert is making informed assumptions or whether he is privy to the exact terms of the deal.

Be that as it may, the Pakistan government has appropriately dealt with the fallout of the conflict and as stated accurately by Prime Minister Shehbaz Sharif has not faced an oil supply crisis due to effective monitoring, adequate reserves and an improved, and need one add, successful strategy that includes austerity measures plus an effective foreign policy. In marked contrast, Indian Prime Minister Narendra Modi appealed to Indians a day ago to revive working from home, limit foreign travel and buy less gold to deal with a price surge due to the Middle East conflict.

Notwithstanding the fact that Pakistan has yet to be subjected to supply shortages, yet the fact remains that the prices of petroleum and products are being constantly upgraded with the petroleum levy upped by 13.91 rupees per litre from 11 May on petrol and diesel. This may indicate that while the foreign policy strategy is paying dividends, yet they have yet to be translated into economic dividends and, disturbingly, the country remains in the grip of flawed policies that include continuing heavy reliance on foreign borrowing, a severely contractionary monetary and fiscal policy and power and tax sectors continuing to perform poorly as they follow the International Monetary Fund standard prescriptions that did not work in the past rather than proposing in-house out-of-the-box solutions.

Copyright Business Recorder, 2026