Middle East Conflict Drives 40% Rise in Bangladesh’s Fuel Imports

Bangladesh’s Fossil Fuel Import Bill Projected to Surge by $4.8 Billion​

New Delhi, March 27 – Bangladesh’s annual fossil fuel import bill is projected to increase by $4.8 billion, representing a 40 per cent rise from 2025 levels, according to a new analysis by Zero Carbon Analytics (ZCA).

The analysis attributes this projected increase to the ongoing crisis in the Middle East. “This type of crisis is repeating itself, mirroring the price shocks caused by Russia’s invasion of Ukraine, leading to increased costs for Bangladesh’s reliance on fossil fuels and its delayed energy transition,” ZCA analysts wrote in their report.

The Russia-Ukraine conflict had previously plunged Bangladesh into an economic crisis, with GDP levels only recovering in 2025. Asian liquefied natural gas (LNG) rose by 390 per cent in the year leading up to Russia’s invasion, followed by a 48 per cent increase in the five months after it. This resulted in power demand shortages and months of power outages. In October 2022, power outages left 130 million people without electricity.

The projected $4.8 billion increase in the fossil fuel import bill threatens to severely drain the country’s foreign exchange reserves, reducing its import cover ratio from 5.7 months to 4.9 months. Bangladesh’s vulnerability to volatile international energy markets is highlighted, with 46 per cent of the country’s total energy supply coming from imports in 2023. In the fiscal year 2024-2025, imports are expected to account for 65 per cent of its power needs.

A significant portion of this vital fuel flows through the Strait of Hormuz, where shipping is now severely disrupted. Bangladesh imports around 1.4 million tonnes of crude oil through the strait annually under long-term contracts with Saudi Aramco and Abu Dhabi National Oil Company. An Aramco cargo of 100,000 tonnes bound for Bangladesh is already delayed in the Gulf due to the ongoing conflict.

Supply pressures are emerging across multiple energy sectors. The Bangladesh Petroleum Corporation (BPC) reported in early March that “Around 60,000 tonnes out of the 293,000 tonnes of diesel planned for import in March have been deferred or cancelled.” Simultaneously, Qatar, which accounts for 75 per cent of Bangladesh’s LNG imports, has suspended production and shipments. Deep LNG dependence is driving fiscal distress across the power sector.

Petrobangla, the state-owned entity managing oil, gas, and mineral resources, anticipates that six out of seven LNG cargoes scheduled for April in its import plan will pass through the Strait of Hormuz. Delivery of half the remaining cargoes is uncertain.