Bangladesh has been pushed onto energy red alert as global oil prices surged to a 14-month high following Iran's closure of the Strait of Hormuz, a move that has rattled world markets and exposed the country's heavy dependence on Middle Eastern fuel supplies.
Brent crude jumped $3.66, or 4.7 per cent, to settle at $81.40 a barrel on Tuesday - its highest level since January 2025 - while US benchmark West Texas Intermediate also advanced sharply. Traders warn that prices could test $100 a barrel if the blockade persists, with some forecasts projecting far steeper spikes in the event of prolonged military escalation.
The Strait of Hormuz, a narrow maritime corridor linking the Gulf to global markets, handles roughly one-fifth of global oil and LNG trade. For Bangladesh, the exposure is acute: about 20 per cent of its crude imports and nearly 55 per cent of its liquefied natural gas (LNG) shipments transit the route. A sustained disruption would force Dhaka to rely heavily on volatile and costlier spot markets.
Tanker traffic through the strait has effectively collapsed. Vessel-tracking data show crude transits fell to just four ships on 1 March, compared with a daily average of 24 since January.
Three of those vessels were Iran-flagged, underscoring the scale of the shutdown. Hundreds of oil and LNG carriers remain stranded near key export hubs, including Fujairah in the United Arab Emirates, while freight rates and war-risk insurance premiums have soared.
The supply shock is already reverberating across producer nations. Iraq, OPEC's second-largest oil exporter, has warned it may cut more than 3 million barrels per day if tankers cannot reach loading terminals. Output at the Rumaila field has been reduced by 700,000 barrels per day, with a further 460,000 bpd trimmed from West Qurna 2. A drone strike at Oman's Duqm port and a fire at Fujairah have further tightened logistics in the Gulf.
In response to export bottlenecks, Saudi Aramco is attempting to divert crude via its east-west pipeline to the Red Sea. Traders caution, however, that spare capacity is limited and infrastructure could become vulnerable if hostilities escalate.
The gas market is facing comparable stress. QatarEnergy has declared force majeure on LNG cargoes following regional hostilities, disrupting long-term supply contracts. For Bangladesh, this development has immediate fiscal consequences. Petrobangla is scrambling to secure spot LNG cargoes at significantly higher prices, increasing pressure on foreign exchange reserves and energy subsidies.
According to Bangladesh Petroleum Corporation, current reserves provide a limited cushion: diesel stocks for roughly 14-15 days, petrol for 15-20 days, octane for up to a month and furnace oil for around three months. LNG supply is expected to remain stable until mid-March. Officials insist there is no immediate shortage but acknowledge that the situation could deteriorate rapidly if the conflict drags on.
Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud said the government has entered "crisis management" mode, urging conservation and prioritising essential sectors such as agriculture during the Boro irrigation season. Retail fuel prices remain unchanged for March, but economists warn that sustained high import costs could compel adjustments, fuel inflation and widen the fiscal deficit.
Global markets are already reacting. European gas prices spiked as much as 40 per cent in volatile trading. Equity markets in Asia and Europe retreated, led by airlines and energy-intensive manufacturers, while energy majors outperformed. Commodity prices, including fertiliser and food inputs, have climbed on fears of supply-chain disruption.
US President Donald Trump has signalled that the US Navy could escort tankers through Hormuz if required and authorised federal agencies to provide political risk guarantees for maritime trade. However, military analysts caution that the conflict could extend for months, especially if Iran shifts towards a protracted regional confrontation.
For Bangladesh, the immediate risk lies in rising import bills and mounting pressure on foreign exchange reserves. A prolonged blockade would not only inflate power generation costs but also heighten the risk of load-shedding and broader price instability across transport, agriculture and manufacturing.
Officials are exploring alternative sourcing from Malaysia, Indonesia and other non-Gulf suppliers, though at a premium. Longer-term strategies include accelerating offshore gas exploration in the Bay of Bengal and expanding grid-scale solar projects to reduce exposure to volatile global oil markets.
With the Strait of Hormuz effectively paralysed and geopolitical risks intensifying, Bangladesh's energy security now hinges on how swiftly global shipping lanes can be restored - and how long the Middle East conflict endures.
