Rising tensions in the Middle East have intensified volatility in global energy markets, directly affecting Bangladesh, a nation heavily reliant on imported fuel. Analysts warn that prolonged instability could trigger further price hikes and disrupt domestic energy supply chains, impacting electricity, transportation, and industry.
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International Market Pressures
The recent strikes by the United States and Israel on Iran have provoked retaliatory measures, including restricted maritime movement in the Strait of Hormuz. Qatar has temporarily halted liquefied natural gas (LNG) production and exports, while Saudi Arabia’s state oil company, Saudi Aramco, has closed its Ras Tanura refinery.
These disruptions have pushed crude oil prices close to $80 per barrel, a 10% increase over the previous week, and LNG prices have surged by 20–25% in global markets. The strengthening of the US dollar has further amplified import costs. Experts caution that if hostilities continue, crude oil could exceed $100 per barrel, placing additional strain on energy-importing countries.
Bangladesh’s Vulnerability
Bangladesh relies almost entirely on imports to meet its petroleum requirements. Crude oil is sourced primarily from Saudi Arabia and the United Arab Emirates, while refined products arrive from China, Singapore, Malaysia, and Indonesia. Around 35% of national gas demand comes from LNG, largely imported from the Middle East. Disruptions in the Strait of Hormuz could therefore have immediate domestic consequences.
Domestic Fuel Reserves
Bangladesh Petroleum Corporation (BPC) reports that current fuel stocks are as follows:
| Fuel Type | Current Stock (Tonnes) | Coverage (Days) |
|---|---|---|
| Diesel | 217,317 | 14–15 |
| Petrol | 21,705 | 17 |
| Octane | 34,133 | 31 |
| Furnace Oil | 78,278 | 60 |
BPC also highlighted that a shipment of 100,000 tonnes of crude oil, scheduled to be loaded from Ras Tanura between 1–3 March, is now uncertain due to the refinery closure. Increased military surveillance in the Strait of Hormuz may further delay deliveries.
Gas Supply and LNG Imports
Daily gas demand in Bangladesh stands at 3.8 billion cubic feet, while supply currently reaches 2.65 billion cubic feet, including 0.95 billion cubic feet from LNG. The government plans to raise LNG imports to 1.05 billion cubic feet during peak summer demand. This year, 115 LNG cargoes are expected: 40 from Qatar, 16 from Oman, and 59 from the spot market. Military tensions may affect the timely arrival of these shipments, potentially reducing electricity generation and causing load shedding.
Risks and Contingency Planning
Diesel reserves are sufficient for approximately two weeks, while petrol and octane can cover 17 and 31 days, respectively. Experts caution that delayed shipments could pressure critical sectors, including agriculture, electricity, and transport.
State Minister for Power, Energy, and Mineral Resources, Anindya Islam Amit, stated that the government is monitoring the situation closely and evaluating alternative suppliers and schedules to avoid supply disruptions. Analysts emphasise that diversification of energy imports may become necessary if international market instability persists, otherwise price increases and shortages may be inevitable.