Although Bangladesh has managed to temporarily stabilise its emerging energy crisis amid the Middle East war, officials warn that securing reliable long-term fuel supplies is becoming increasingly difficult.
Authorities say the country currently holds fuel stocks sufficient for two months, while liquefied natural gas (LNG) supply is secured for at least 45 days.
However, prolonged instability in the Strait of Hormuz has disrupted key long-term supply channels with Middle Eastern partners, forcing the country to rely heavily on the volatile global spot market.
Energy officials say the government is exploring ways to turn these emergency arrangements into more structured and sustainable supply frameworks to protect long-term energy security.
Bangladesh’s energy imports are estimated at $10-$12 billion annually, accounting for more than 4 per cent of GDP. Officials warn that this leaves macroeconomic stability, foreign exchange reserves, and industrial output exposed to external shocks.
The scale of the dependency on imported fuels makes the country vulnerable to global disruptions.
The country remains heavily reliant on a narrow, geopolitically sensitive supply chain centred on the Persian Gulf. Around 20-30 per cent of total gas supply comes from imported LNG under long-term contracts with QatarEnergy and Oman’s OQ Trading.
Crude oil is sourced entirely from state suppliers, including Saudi Aramco and the Abu Dhabi National Oil Company. Meanwhile, the growing liquefied petroleum gas (LPG) market depends on imports from Saudi Arabia, Kuwait, Qatar, and the UAE.
Nearly all these supplies transit the Strait of Hormuz. Officials warn that any sustained disruption in this maritime chokepoint could halt Bangladesh’s energy inflows.
Sources at the Bangladesh Petroleum Corporation (BPC) confirmed that a crude oil tanker carrying 100,000 tonnes remains stranded in the Persian Gulf. Some shipments have been rerouted through the Red Sea, including Yanbu Port, but officials say this has already caused operational strain.
A recent shipment from Saudi Arabia’s Red Sea port reportedly contributed to a nearly 20-day shutdown of the country’s sole state-owned refinery in Chattogram before its arrival on 5 May, while transport costs surged significantly.
BPC General Manager (Operations) Mohammad Zahid Hossain said global energy freight costs have risen by as much as 100 per cent on certain routes since the onset of the conflict, putting additional pressure on procurement budgets.
“Bangladesh is actively exploring alternative sourcing strategies, including non-Middle Eastern suppliers under government-to-government agreements, to diversify long-term supply,” he added.
The country currently maintains G2G arrangements with Saudi Arabia, the UAE, Qatar, Kuwait, Oman, China, Malaysia, Indonesia, India, and Thailand. However, officials acknowledge that no firm shift toward alternative long-term suppliers has yet been finalised.
Spot market reliance
The Gulf disruption has severely affected LNG imports, leaving long-term contracts constrained.
Petrobangla sources confirmed that no LNG cargoes are currently arriving through the Strait of Hormuz, making it difficult to execute supply agreements with Qatar and Oman.
As a result, Bangladesh is being forced to procure LNG from the international spot market at nearly double the contracted price. Long-term agreements for around 105 LNG cargoes annually have become partially non-operational. Spot prices now hover around $20 per MMBtu, compared with $10 under long-term contracts, highlighting the scale of the cost burden.
Petrobangla Chairman Mohammad Erfanul Haque said negotiations are underway with suppliers across Asia, Europe, and Africa to diversify long-term LNG sources and reduce reliance on a single corridor.
Current reserves are expected to meet national demand only until mid-June, with one additional cargo due shortly, providing only a brief extension of supply security, he told TIMES.
Strait of Hormuz closure and cargo impact
Since February, when the Iran-US conflict escalated, the Strait of Hormuz – through which 100 per cent of Bangladesh’s crude oil, 71 per cent of imported LNG, and a significant portion of refined petroleum products transit – has remained closed.
Bangladesh imports more than 115 LNG cargoes annually. For May 2026 alone, 11 shipments were planned, most sourced from the spot market.
In parallel, BPC has floated international tenders under the open tender method covering jet fuel, furnace oil, and petrol. A separate tender for LPG imports was also issued.
Officials said participation in fuel import tenders has been relatively strong, indicating ongoing international supplier interest. However, the LPG tender received weak responses, prompting plans for a re-tender to stabilise supply.
Electricity sector impact
Imported fuels are increasingly central to Bangladesh’s electricity generation. Gas and LNG now account for 43-49 per cent of total power output. Imported LNG alone meets nearly one-third of national gas demand, as domestic reserves continue to decline.
Diesel-based generation has fallen to about 2 per cent of the energy mix due to high operational costs, producing only 290MW compared with more than 12,000MW from gas-fired plants.
Officials warn that without diversification of suppliers and more secure long-term contracts, Bangladesh’s energy security and broader economic stability remain at risk.
