Bangladesh faces fuel import delays as Middle East conflict disrupts

Bangladesh’s energy ministry warns that ongoing conflict in the Middle East could delay fuel imports, heightening fears of shortages for diesel, gasoline and LPG in the coming weeks [1]. The government is actively seeking alternative suppliers, but many proposals remain unconfirmed, leaving the outlook uncertain.

Key takeaways

• Over 80% of crude oil and 65% of LNG imports historically come from the Middle East, now disrupted by war [1].
• The ministry has secured tentative deals with two firms for diesel shipments, offering discounts of up to $40 per tonne [1].
• LPG imports, which meet 99% of domestic demand, fell from 75% to 51% of supply from the region, and April deliveries are uncertain [1].

Search for alternative fuel sources

Since the war began on 28 February, Bangladesh’s traditional supply routes through the Hormuz Strait have been effectively closed [1]. While Iran has indicated that Bangladeshi vessels may still transit the strait, repeated attacks on regional energy infrastructure make the timing of a return to normalcy unclear. In response, the Ministry of Power, Energy and Mineral Resources has opened direct negotiations with at least eleven foreign companies. Two firms—AP Energy Investments Ltd. and Hong Kong‑based Superstar International—have received government approval to deliver a combined 300,000 metric tonnes of diesel at discounts ranging from $3 to $40 per barrel relative to the global Platts price [1].

Other potential suppliers, including PetroGas International, A&A Energy Oil & Gas, and several trading houses from Dubai, Oman and the United States, have submitted proposals with varying discount structures, but none have been finalized [1]. Officials stress that while market prices are rising, the government intends to absorb the cost rather than raise domestic diesel, octane or petrol prices [1].

LPG import concerns

LPG, which fuels a large share of Bangladesh’s private sector, is also under pressure. The country imports roughly 15,000 tonnes of LPG each month, with 99% supplied by the private sector [1]. In the current fiscal year, the share of Middle Eastern LPG shipments dropped from 75% to 51%, and the Hormuz closure has halted most imports from the Gulf [1]. Traders report that March saw limited arrivals, but April deliveries remain doubtful due to soaring freight rates and heightened geopolitical risk [1]. The Bangladesh Energy Regulatory Commission has set a premium of $120 per tonne, further straining importers [1].

Why it matters

Bangladesh’s heavy dependence on Middle Eastern crude and LPG makes the nation vulnerable to supply shocks from regional conflicts. Delays or gaps in fuel deliveries could pressure the country’s foreign exchange reserves and force the government to reconsider its policy of shielding consumers from global price spikes. Continued negotiations with alternative suppliers aim to diversify sources, but the lack of firm commitments leaves the risk of fuel shortages and potential disruptions to key sectors, such as the garment industry, unresolved. Monitoring the evolution of the Middle East conflict and the progress of new import contracts will be crucial for Bangladesh’s energy security in the months ahead.