Growing military tensions in the Middle East have begun to exert pressure on Bangladesh’s industrial and energy sectors. Uncertainty in fuel supplies has raised concerns that industrial production in the country may be disrupted.
In response, the government has already introduced energy rationing, reduced gas supply to power plants and industries, and intensified efforts to procure oil and liquefied natural gas (LNG) from alternative sources.
Energy sector analysts warn that if the tensions in the Middle East persist, the impact will not remain confined to global energy markets but could spill over into industrial and manufacturing activities.
Any reduction in gas supply for electricity generation or industrial use could disrupt production operations.
Industrial entrepreneurs share similar concerns. They say that disruptions in energy supply could slow industrial output and place pressure on export sectors.
Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, said the Middle East conflict is unlikely to significantly affect raw material imports for the ready-made garment industry. However, a fuel shortage could disrupt production.
He added that if the government imports fuel at higher prices and the cost burden is passed on to industries, production expenses will increase. In that case, the government could consider temporarily reducing existing duties, taxes, and value-added tax on fuel imports.
To manage the situation, the government has urged citizens to conserve energy. It has advised reducing unnecessary travel, using public transport instead of private vehicles, and introducing carpooling arrangements. Households have also been asked to minimize gas wastage, while government and commercial institutions have been instructed to ensure efficient energy use.
Energy experts say that if the situation in the Middle East does not stabilize quickly, volatility in the global energy market could intensify.
Officials in the energy sector say rising military tensions involving Iran, the United States, and Israel have created uncertainty in the global energy supply chain. Concerns have emerged over possible disruptions to shipping through the Strait of Hormuz, which is particularly worrying for Bangladesh as an energy-import-dependent country.
A significant share of the world’s crude oil and liquid fuel shipments passes through this strait. Any military conflict or blockade there could severely disrupt global fuel supplies. Such disruptions could also affect Bangladesh, where electricity generation, industrial activities, and a large portion of the transport sector depend heavily on imported energy.
Additional shipping time affect RMG exports
Instability in the Middle East and the Red Sea region has already imposed additional time and cost pressures on Bangladesh’s seaborne ready-made garment exports for more than two years. Most westbound shipments to Europe, the United States, and other Western markets are now being routed around Africa via the Cape of Good Hope.
Md Mohiuddin Rubel, a former director of the BGMEA, said that since late 2023 and early 2024, nearly all westbound RMG shipments from Bangladesh have been transported through this alternative route. As a result, shipping times have increased by an average of 10 to 15 days compared with earlier routes. Transport costs have also risen.
He noted that this additional time is not a new delay. For nearly two years the extended shipping duration has effectively become the norm. The current 10 to 15 extra days reflect conditions that have been in place since 2023–2024.
Business leaders say the RMG industry depends on delivering goods according to strict schedules set by international buyers. Longer shipping times therefore create additional pressure on production planning, supply management, and coordination with buyers.
The extended maritime route has also increased vessel charter rates, insurance costs, and overall logistics expenses, ultimately affecting exporters’ cost structures.
Government sources say several steps have already been taken to address the situation. Fuel allocations at petrol pumps have been reduced by about 10 percent. Gas supply for electricity generation has also been cut by around 50 million cubic feet per day. In addition, gas supply to most fertilizer factories has been temporarily suspended, except for the Shahjalal Fertilizer Factory in Sylhet.
Officials say these measures are intended to ensure energy conservation so that supplies to critical sectors can be maintained even if the situation worsens. However, if such restricted supply continues for an extended period, it could affect industrial production.
Uncertainty has also emerged regarding LNG supply. According to Petrobangla sources, Bangladesh was scheduled to receive seven LNG cargoes in March, including six from Qatar and one from Angola. However, Qatar has informed authorities that it will not be able to deliver two of the cargoes.
To cover the shortfall, Bangladesh has been forced to purchase LNG from the spot market, where prices are significantly higher than usual. Petrobangla has already bought two LNG cargoes from international trading firms Gunvor Asia and Vitol Asia. These shipments are expected to arrive in the country on March 15 and March 18.
Officials at the energy ministry said the price of one cargo exceeded $28 per MMBtu, while the other cost nearly $24. Only a few days earlier, spot market LNG prices were below $10 per MMBtu, meaning prices have risen roughly two and a half times within a short period.
The attack on Qatar’s energy infrastructure has caused major volatility in the global LNG market. As a result, Bangladesh has been compelled to procure LNG from the spot market at higher prices.
Qatar is Bangladesh’s largest source of LNG supply. Under long-term agreements, the country receives a substantial number of LNG cargoes from Qatar each year. However, in the current situation, QatarEnergy has invoked the force majeure clause in several contracts.
Under this provision, companies can temporarily suspend supply without legal liability under exceptional circumstances. Petrobangla said QatarEnergy formally informed Bangladesh of the decision on March 2.
Bangladesh plans to import a total of 115 LNG cargoes this year, about 40 of which are expected to come from Qatar. The uncertainty surrounding supplies from the country has therefore raised new concerns about energy security.
In response, the government has begun efforts to secure fuel from alternative sources. Discussions are underway with suppliers in Singapore, Malaysia, Indonesia, China, and several African countries. The possibility of procuring LNG from Australia, the United States, and Malaysia is also being explored.
The Bangladesh Petroleum Corporation has said it is also trying to obtain additional cargoes from countries that already have government-to-government energy supply agreements with Bangladesh.
According to official figures, the country currently has diesel reserves sufficient for about nine days. Octane reserves are sufficient for about 15 days, while furnace oil stocks can meet demand for roughly 60 days. Only a few weeks ago, furnace oil reserves stood at around 93 days.
