Bangladesh should explore importing refined fuel from Russia, particularly diesel, to reduce the risk of energy shortages triggered by the war in the Middle East, energy sector stakeholders and business leaders say.
The proposal has been made as the United States signals a possible softening of sanctions on countries purchasing Russian oil and petroleum products, partly to prevent further spikes in global energy prices.
Oil prices climbed to more than $100 per barrel on Thursday after three additional cargo vessels were reportedly struck in the Gulf, heightening concerns over supply disruptions.
The Middle East conflict, triggered by US and Israeli attacks on Iran and Tehran’s retaliatory strikes on neighbouring Gulf states, has unsettled global energy markets and raised worries about Bangladesh’s fuel supply chain.
Disruptions to oil shipments through the Strait of Hormuz have placed part of the country’s imported fuel supply at risk, prompting renewed debate over diversifying fuel sources.
The government has already introduced a fuel rationing system that caps the amount of fuel a vehicle can purchase at a time in an effort to prevent panic buying.
The measure has led to long queues of vehicles at petrol stations across the country, including in the capital.
Industry insiders warn that a prolonged conflict could deepen the crisis and put heavy pressure on Bangladesh’s economy.
“If alternative sources are not secured quickly, the country could face a serious energy crisis,” said Mahfuzul Haque Shah, former director of the Chattogram Chamber of Commerce and Industry.
He said Bangladesh should diversify supply sources by exploring markets in Africa and other regions.
The United States has already granted India certain concessions for importing Russian oil, and Bangladesh has sought a similar arrangement.
Speaking to reporters after a meeting with the US ambassador in Dhaka on 11 March, Planning Minister Amir Khasru Mahmud Chowdhury said Bangladesh had requested the same facility.
“If Bangladesh is also given such an opportunity, it will greatly support our economy,” he said, adding that the US side had indicated the matter would be conveyed to Washington.
After the Russia–Ukraine war began, the European Union, the Group of Seven and the United States imposed a series of economic sanctions on Russia, including restrictions on Russian oil exports and a price cap mechanism, limiting many countries’ ability to purchase Russian crude directly.
However, amid volatility in global energy markets caused by the Iran war, the US recently issued a 30-day waiver allowing countries to purchase Russian oil and petroleum products currently stranded at sea.
According to international reports, the temporary waiver – effective until 11 April – is intended to help stabilise global energy supplies.
Challenges of refining Russian oil
Industry insiders say importing Russian crude oil may not be straightforward, as Bangladesh’s only refinery – Eastern Refinery Limited in Chattogram – is primarily designed to process crude sourced from the Middle East.
They say importing refined petroleum products from Russia could be a more practical option.
Seacom Group Chairman Mohammed Amirul Hoque told TIMES of Bangladesh that the first step would be to determine whether Russian crude could be refined at the facility.
“Refineries are usually configured to process specific grades of crude oil. It needs to be tested whether Russian crude is compatible with our refinery,” he said.
He also pointed to logistical challenges.
Fuel shipments from the Middle East typically take 10 to 12 days to reach Bangladesh, while cargoes from Russia could take more than 20 days, potentially increasing both delivery times and costs.
Even so, traders say Bangladesh should secure alternative energy sources as the crisis in the Middle East deepens.
“Eastern Refinery typically processes Middle Eastern crude oil, whereas Russian crude is heavier and may not be suitable for our refinery,” said Mahfuzul Haque Shah.
“However, Bangladesh can consider importing refined petroleum products from Russia.”
Over dependency on fuel imports
Bangladesh relies on imports to meet about 95 per cent of its fuel demand, with most shipments passing through the Strait of Hormuz, making the country particularly vulnerable to disruptions along Middle Eastern supply routes.
Data from the National Board of Revenue show that Bangladesh’s annual fuel demand stands at roughly 7 million tonnes.
The country imports crude and refined petroleum from several suppliers, including Saudi Arabia, the United Arab Emirates, Oman, Kuwait, Iraq and Qatar, as well as Singapore, Malaysia and India.
After crude oil is imported, Eastern Refinery Limited processes it into around 13 different products, including diesel, petrol, octane and jet fuel.
Diesel accounts for the largest share of Bangladesh’s fuel consumption, with annual imports ranging between 4.5 million and 5 million tonnes – about 70 per cent of the total fuel imports.
Fuel is widely used across the economy for electricity generation, fertiliser production, transportation and agriculture, with the Bangladesh Petroleum Corporation responsible for most of the country’s fuel procurement.
Official data show that fuel imports declined during the 2024-25 fiscal year.
Diesel imports fell by 21.65 per cent, furnace oil by 10.22 per cent, and petroleum oil imports by 16.75 per cent compared with the previous fiscal year.
Diesel imports dropped to 2.794 million tonnes from 3.567 million tonnes a year earlier, a reduction of about 772,000 tonnes.
Officials at Bangladesh Petroleum Corporation attributed the decline to several factors, including the shutdown of fuel-oil-based captive power plants, increased use of liquefied natural gas, lower oil demand and the depreciation of the local currency.
They also said diesel imports have recently been opened to the private sector, while some petrochemical companies are supplying fuel oil as a by-product of their industrial operations.
Attempts to contact Bangladesh Petroleum Corporation Chairman Md Rezanur Rahman for comment were unsuccessful, as he did not respond to phone calls.
