Amid sharp swings in global energy prices triggered by the Iran war, Bangladesh opened 16.63 percent more letters of credit (LCs) for petroleum imports in the 2025-26 fiscal year. According to Bangladesh Bank, petroleum import LCs rose to $11.11 billion from $9.52 billion a year earlier.
The figures were published in a Bangladesh Bank report on Sunday.
It was not only new fuel import commitments that increased. More dollars were also spent settling earlier obligations. Petroleum LC settlements rose 6.42 percent to $10.68 billion in the last fiscal year.
This means Bangladesh was paying for earlier fuel imports while opening an even larger volume of new LCs for future purchases.
The international energy market has remained highly volatile since the Iran war began. Brent crude stood at $72.48 a barrel on 27 February, the day before the conflict started.
After fighting broke out on 28 February, disruption to oil shipments through the Strait of Hormuz pushed prices sharply higher. Brent spot prices crossed $100 a barrel in early March and climbed above $124 by the end of April.
That price surge meant more dollars were needed to buy fuel from the international market. Bangladesh also had to rely heavily on the spot market after the closure of the Strait of Hormuz disrupted regular supply routes.
Bangladesh depends on imports for about 95 percent of its annual petroleum demand of 7 million tonnes and nearly one-third of its gas consumption. Saudi Arabia, the United Arab Emirates and Qatar supply most of the country’s fuel.
Central bank data show that petroleum import commitments grew far faster than overall import LCs. Total new import LCs increased by about 7 percent in the last fiscal year, while petroleum LCs rose 16.63 percent.
Overall LC settlements, by contrast, remained almost unchanged.
This suggests that future fuel-related payment obligations are building faster than current dollar outflows. As the newly opened LCs come up for settlement, demand for dollars from commercial banks could rise.
The pressure would intensify further if international oil prices move higher again.
Bangladesh’s overall merchandise imports also rose by about 10 percent in the last fiscal year, while exports remained broadly flat. The current account deficit widened at the same time.
However, the country’s foreign exchange reserve position is stronger than a year ago. Bangladesh Bank’s BPM6 measure put reserves at $32.26 billion on 12 August.
According to the sector insiders, the bigger question is not an immediate crisis but how much additional pressure the growing fuel-import payment pipeline could put on the dollar market in the coming months if the Iran war drags on and global energy prices remain elevated.
