Bangladesh faces a double blow from renewed Houthi attacks in the Red Sea and Bab al-Mandab Strait, with the disruption simultaneously pushing up the cost of crude oil imports and threatening ready-made garment (RMG) exports to Europe.
Bangladesh’s fuel oil imports are facing renewed disruption as heightened security risks linked to the attacks are forcing oil tankers to avoid the traditional shipping route, adding millions of dollars to the cost of individual shipments. The disruption is also putting pressure on Bangladesh’s container trade with Europe, as shipping lines continue to divert vessels around the Cape of Good Hope. The longer voyages are increasing fuel, insurance, security and vessel-operating costs while pushing up freight rates and extending delivery times.
For Bangladesh, the consequences could be significant as the country depends heavily on maritime routes for both energy supplies and international trade.
$4m extra for one crude shipment
Captain Md Mozibur Rahman, General Manager (Chartering and Tramping) of Bangladesh Shipping Corporation (BSC), told TIMES of Bangladesh that the ongoing security situation in the Red Sea is hampering the transportation of fuel oil to Bangladesh. The latest fuel-oil shipment from Saudi Arabia arrived in Bangladesh on September 12 after the vessel avoided the conventional Red Sea route for security reasons, resulting in a longer voyage.
Bangladesh Petroleum Corporation (BPC) imports both crude and refined petroleum products, with BSC involved in transporting a portion of the shipments.
Bangladesh imports around 1.5 million tonnes of crude oil annually, mainly Saudi Arabia’s Arabian Light and the United Arab Emirates’ Murban crude. On average, 13 to 14 crude-oil tankers arrive in Bangladesh each year, with at least three more shipments scheduled for October, November and December.
PK Roy, Manager (Operations) at Prime Ocean Trade Limited, a local shipping agent handling BPC’s crude-oil imports, said a tanker recently carrying crude from Saudi Arabia’s Yanbu Port took 52 days to reach Chattogram Port after taking a lengthy alternative route.
Under normal circumstances, the voyage would take no more than about 16 days. The vessel sailed from Yanbu on July 22 but had to take a substantially longer route because of security concerns in the Red Sea region.
According to Roy, the extended voyage increased costs related to vessel chartering, fuel, security and other operational expenses by around $4 million for a single shipment. As the cargo owner, Bangladesh ultimately bears these additional costs.
He said the prolonged disruption had previously caused another crude-oil tanker, Nordic Pollux, to remain stranded for nearly three months before eventually reaching Chattogram and discharging its cargo in July.
However, the next crude-oil tanker coming from the UAE’s Fujairah Port is scheduled to reach Bangladesh by September 27 using the conventional route, as vessels from Fujairah do not need to pass through the Red Sea or the Houthi-controlled high-risk area.
Roy said shipowners remain reluctant to send vessels through the Red Sea because of the risks to ships and crews. A single BPC crude-oil shipment carries cargo worth around $70 million to $80 million, making vessel security a major concern for owners and charterers.
Container freight costs surge
The crisis is also having a direct impact on Bangladesh’s container trade, particularly shipments bound for Europe.
Harun-ur-Rashid, Chairman of the Bangladesh Container Shipping Association (BCSA), told TIMES that almost all major container shipping lines are currently avoiding the Red Sea route because of security concerns.
Instead, vessels are sailing around the Cape of Good Hope at the southern tip of Africa, adding considerable distance and time to Asia-Europe voyages.
Harun-ur-Rashid said shipping companies had already shifted to the longer route after the Red Sea crisis emerged in 2023-24, and the latest security concerns have reinforced their reluctance to return to the shorter route.
Although a limited number of vessels continue to use the Red Sea under certain circumstances, most major operators are taking the longer African route.
“If the shorter Red Sea route were operational, transportation costs would be at least 30 per cent lower,” the BCSA Chairman said.
The longer voyage means higher fuel consumption, increased operating costs and longer transit times, all of which are reflected in freight rates.
According to data provided by Harun-ur-Rashid, shipping a 40-foot container from Bangladesh to Europe through the Red Sea cost roughly $2,800–$4,000 two or three years ago. The rate has now risen to around $6,000-$7,000, depending on the shipping line and prevailing tariff.
The issue is particularly important for Bangladesh because Europe and the US account for around 63 per cent of the country’s total exports, according to Export Promotion Bureau data.
7–10 extra days for Europe-bound cargo
Shahed Sarwar, former director of the Bangladesh Shipping Agents Association and Deputy Managing Director of Crown Navigation, said Houthi attacks have severely disrupted one of the world’s most important maritime trade corridors.
With vessels avoiding the Red Sea and Suez Canal, ships travelling between Asia and Europe are being forced to sail around the Cape of Good Hope, adding around seven to 10 days to the journey. The additional distance raises fuel and operational costs and contributes to higher container freight charges, he said.
The Red Sea-Bab al-Mandab-Suez route is a crucial maritime corridor linking Asian manufacturing centres with European markets.
It is used to transport crude oil, petroleum products, liquefied natural gas, grain, consumer goods and containerised cargo.
Any further deterioration in security along the route could therefore put additional pressure on Bangladesh’s import bill while simultaneously increasing the cost and delivery time of its exports. A prolonged disruption could also affect exporters through higher freight charges, longer transit times and uncertainty over delivery schedules.
BGMEA Director and Deputy Managing Director of Asian Group, Sakeef Ahmed Salam, said, “Particularly on the Europe route, the uncertainty over vessel movements and transit times caused by the Red Sea crisis is a matter of concern for our ready-made garment exports. It could increase lead times and transportation costs and make it more difficult to ensure timely delivery of goods. It is crucial to ensure effective alternative arrangements as soon as possible.”
