The Dhaka Chamber of Commerce and Industry (DCCI) has expressed deep concern over the impact of the ongoing geopolitical conflict centered on the United States, Israel and Iran.
The organization says that the rising tension in the Middle East has created instability in the global energy market, international trade routes and the financial system, which may also have a significant impact on the Bangladesh economy.
In a press release on Wednesday (March 11), the DCCI said that due to the recent conflict, there has already been instability in the global energy market and maritime trade. As the Middle East region is one of the main sources of crude oil and liquefied natural gas (LNG) supply in the world, oil prices in the international market have risen rapidly, exceeding US$ 100 per barrel due to fears of supply disruption.
According to the DCCI, if oil prices in the international market remain high for a long time, it will put significant pressure on Bangladesh's external sector. According to their calculations, if the price of oil increases by $10 per barrel in the global market, Bangladesh's monthly import costs could increase by about $70 to $80 million.
In addition to energy costs, the ongoing tension over the Strait of Hormuz, an important waterway in the Middle East, is also affecting the international shipping system. About 20 percent of the world's oil and gas is transported through this sea route.
As a result, if there is a long-term disruption in the supply system on this route, freight charges, insurance premiums and product transportation time are likely to increase significantly in Bangladesh's import and export activities.
DCCI says that Bangladesh's export-oriented industries—especially the ready-made garment industry—may face additional logistics costs, supply chain disruptions and risks of transportation by sea in this situation.
Along with this, the country's export growth has slowed down significantly in the last seven months due to various local political and economic reasons.
If the conflict spreads further in such a situation, the costs in both imports and exports may increase alarmingly.
However, despite global uncertainty, more than 10 ships carrying various fuels including LNG, LPG, and diesel have recently arrived at the Chittagong port, according to the DCCI. This is a positive sign that the country's energy supply situation is stable in the short term.
In this situation, the organization has called on the government to take necessary advance and effective policy steps to address potential risks. In particular, emphasis has been placed on strengthening strategic energy reserves, diversifying energy import sources, ensuring the effectiveness of the supply chain, and strengthening coordination between the government, financial institutions, and the private sector.
