With the ongoing conflict between Iran and Israel escalating daily, fears are intensifying over a possible closure of the Strait of Hormuz-a critical global oil and gas chokepoint. For Bangladesh, such a development could spell serious trouble, particularly in terms of fuel oil imports and liquefied natural gas (LNG) shipments, potentially triggering a fresh wave of energy price hikes and supply disruptions.
The conflict, which has now entered its sixth day, has seen both countries targeting each other’s key infrastructure. Analysts warn that if Israel carries out a large-scale attack on Iran’s oil and energy facilities, Iran may retaliate by shutting down the Strait of Hormuz. This narrow waterway, situated between Iran and the United Arab Emirates, serves as the main transit route for energy exports from the Persian Gulf.
Global Chokepoint, National Concern: The Strait of Hormuz facilitates the transport of approximately 20.9 million barrels of oil per day-about 20% of the global seaborne oil trade. The route is used by major oil producers such as Saudi Arabia, the UAE, Iraq, Kuwait, Qatar, and Iran to export crude oil, petroleum products, and LNG. Closure of this strategic channel would instantly shock global energy markets.For Bangladesh, the fallout could be immediate and far-reaching.
“We bring crude oil from Saudi Arabia and the UAE through the Strait of Hormuz. If it is closed, then we’re definitely at risk of facing a crisis,” said Dr. AKM Azadur Rahman, Director (Operations and Planning) at Bangladesh Petroleum Corporation (BPC).
According to BPC data, about 20% of Bangladesh’s refined fuel oil and 30% of its crude oil are transported via this strait. The country’s lone refinery processes around 1.5 million tons of crude oil per year-supplied mainly as Arabian Light from Saudi Arabia and Marban Light from the UAE, both of which come through Hormuz.
LNG Imports from Qatar Under Threat: In addition to oil, the energy crisis for Bangladesh could deepen due to the country’s heavy reliance on liquefied natural gas (LNG) imported from Qatar. The entire LNG shipment chain also depends on the uninterrupted function of the Strait of Hormuz.”All of our LNG cargoes from Qatar are transported through the Strait. There is no alternative land or waterway for these shipments,” a senior Petrobangla official said. “If the Strait is closed, it will be a serious crisis for us.”
Qatar is Bangladesh’s primary LNG supplier. The two countries signed a 15-year agreement in 2017, under which 1.8 to 2.5 million metric tons of LNG are imported annually. A second 15-year deal was signed in 2023 to begin deliveries of 1.8 million metric tons per year from 2026. Closure of the Strait of Hormuz would paralyze this vital supply line.
Oil Prices Already Climbing: Even before any closure of the Strait, global oil markets have begun reacting to the geopolitical tension. Prices are already on the rise, which will inevitably be reflected in Bangladesh’s local energy prices.”We determine the purchase price of fuel oil by calculating the average of the three days before and after the ship is loaded,” said Dr. Azadur Rahman. “If international prices go up during that period, our procurement costs increase accordingly. Naturally, this will raise domestic fuel oil prices.”
Indeed, if the crisis deepens and prices spike further, the domestic fuel oil price could see a significant hike-adding pressure to already strained household and industrial energy bills, and further fueling inflation.
Strategic Vulnerability and Limited Options: Bangladesh’s over-dependence on a narrow set of suppliers and transit routes exposes it to significant risk in times of global conflict. While the government is seeking ways to mitigate the impact, options are limited.
“We are trying to resolve this situation by exploring alternatives,” said a BPC official. “There are some private plants that import oil from countries outside the Strait of Hormuz route. So, in that sense, we are in a slightly better position than others. We may pay more, but we will still get fuel oil.”
However, such alternatives are not without challenges. Oil imports are largely governed by long-term tenders and contracts, making it difficult to suddenly shift sourcing without facing premium costs or logistical hurdles.
Moreover, LNG remains irreplaceable in the short term. Unlike oil, it cannot be trucked or piped over long distances from other regions. Bangladesh lacks the infrastructure to import LNG from sources outside the Persian Gulf, at least in the near future.
Potential Global Shock, Local Repercussions: International energy analysts agree that the Strait of Hormuz is a critical artery in the global energy system. Any disruption could trigger a global supply crunch, drive prices to record highs, and destabilize economies across Asia, including Bangladesh.
Sina Tusi, senior analyst at the Center for International Policy, told Al Jazeera that Iran closing the Strait would be its “highest level of response” to any large-scale attack by Israel. “Today there were counter-attacks around the energy installations. If this trend continues, the energy supply from the entire Persian Gulf region could be threatened,” he warned.
Iranian state media, IRINN, also reported that Tehran is “actively considering” a closure of the Strait of Hormuz-highlighting the seriousness of the threat.
Looking for a Way Forward: Bangladesh’s energy policymakers are now closely monitoring global developments and working to formulate contingency plans. But even in the best-case scenario-if the strait remains open-the rising price trend may persist due to sustained uncertainty and speculation in global markets.
Fuel-dependent sectors, from manufacturing to transport, could be hit hard. Higher fuel costs may disrupt industrial production, raise public transport fares, and increase electricity generation costs, especially as LNG shortages loom.
Energy experts are urging the government to:Secure oil supply routes outside the Gulf.Diversify LNG procurement sources.Establish emergency reserves of fuel oil and LNG.Speed up development of floating storage and regasification units (FSRUs) with access to alternative maritime routes.
The Strait of Hormuz, though geographically distant, is economically central to Bangladesh’s energy security. In a volatile geopolitical environment, this dependence has emerged as a key vulnerability. With war clouds hanging over the Middle East, the threat is no longer theoretical-it is immediate and urgent.Unless diplomatic channels defuse the Iran-Israel crisis soon, Bangladesh may be forced to brace for higher fuel costs, possible LNG shortages, and renewed economic pressure from the global energy storm.
