[🇧🇩] Energy Security of Bangladesh

[Saif]

Bangladesh asks for US approval to import Russian oil, refined fuel amid global disruptions

Bangladesh has requested the United States to grant a special waiver to purchase refined diesel and other petroleum products from Russian sources due to global supply chain disruptions. Foreign Minister Khalilur Rahman presented the appeal to US Energy Secretary Chris Wright during a meeting at th

thefinancialexpress.com.bd

Bangladesh asks for US approval to import Russian oil, refined fuel amid global disruptions

bdnews24.com
Published :
Apr 01, 2026 21:57
Updated :
Apr 01, 2026 21:57

Bangladesh has requested the United States to grant a special waiver to purchase refined diesel and other petroleum products from Russian sources due to global supply chain disruptions.

Foreign Minister Khalilur Rahman presented the appeal to US Energy Secretary Chris Wright during a meeting at the Energy and Mineral Resources Division on Tuesday, according to the Bangladesh Embassy in Washington.

Khalilur explained the “energy-related challenges Bangladesh is going through due to supply chain disruptions” in the meeting, the embassy said.

“He requested the US to provide Bangladesh special waiver to buy refined diesel and other petroleum products from Russian sources,” it added.

The minister emphasised that the request aims to protect farmers ahead of the coming planting season and prevent any adverse impact on harvests and national food security.

He also noted that Bangladesh had been unable to benefit from an earlier limited global waiver on Russian oil, as no tankers were bound for the country at the time.

The two sides discussed alternative options to procure refined oil from third countries, bypassing direct Russian crude.

Secretary Wright acknowledged Bangladesh’s energy challenges and expressed Washington’s commitment to support Bangladesh in ensuring energy security.

“He said the US will positively consider the requests of Bangladesh and assured that he and his team would work closely with the relevant departments of the US government to this end,” the embassy said.

Longer-term cooperation on sustainable energy solutions and potential increased procurement of US energy products were also discussed.​

 

[Saif]

Bangladesh must rethink its supply chains

Nearly one-fifth of the world's oil, around 18 to 19 million barrels a day, passes through the Strait of Hormuz, accounting for about 20 per cent of global petroleum consumption -the same route that carries Bangladesh's imported fuel. The tensions in the Gulf may seem distant from Bangladesh; howev

thefinancialexpress.com.bd

Bangladesh must rethink its supply chains

Ferdoush Saleheen and Md Mamun Habib

Published :
Apr 02, 2026 00:04
Updated :
Apr 02, 2026 00:04

Nearly one-fifth of the world's oil, around 18 to 19 million barrels a day, passes through the Strait of Hormuz, accounting for about 20 per cent of global petroleum consumption -the same route that carries Bangladesh's imported fuel. The tensions in the Gulf may seem distant from Bangladesh; however, the country's economy is heavily reliant on energy supplies, maritime trade routes, and, most importantly, over five million of our remittance fighters deployed in the Gulf countries.

Over 80 per cent of Bangladesh's crude oil imports, around 6 to 7 million tonnes of petroleum annually, come from the Middle East, rendering the country vulnerable to geopolitical disturbances. Bangladesh had to purchase LNG shipments from the spot market at nearly three times the earlier prices this year, according to Reuters. Price spikes quickly through the economy, and costs escalate for power generation, transport services, and petroleum import businesses. However, energy is merely the first supply chain shock.

The second supply chain shock comes through global logistics and maritime trade routes. Bangladesh's export economy, mainly the readymade garments (RMG) industry, earned over $47 billion in 2023-24, representing for 84 per cent of overall exports. This sector relies on shipping lanes and air cargo networks connecting South Asia to Europe and North America via Gulf logistics hubs like Dubai and Doha.

Geopolitical tensions delay goods transit and raise freight costs at key centres. Due to airlines rerouting flights across the Middle East, hundreds of South Asian air cargo shipments and containers have been suspended. Delays can harm Bangladesh's export-driven economy, where on-time delivery develops buyer trust.

Remittances constitute a third layer of vulnerability in the supply chain system. Every year, Bangladeshi labourers who live and work in Gulf countries send back billions of dollars home. The number of these workers exceeds five million.

Through the year 2025, Bangladesh was the beneficiary of more than $32 billion in remittances, with approximately half of those remittances coming from the economies of the Gulf region. These revenues contribute to the maintenance of domestic demand and the strengthening of foreign exchange reserves.

More than five million Bangladeshi migrant workers are currently employed across GCC countries, with the largest concentration in Saudi Arabia and the United Arab Emirates (UAE), forming one of the largest labour diasporas in the region. Global volatility can impact Gulf labour markets. Poor host nations' economies or tight migration policies may reduce remittances. This would reduce household income and Bangladesh's product and service demand. Therefore, consumer demand could change quickly.

Markets may shrink as consumers avoid spending beyond basic necessities. Bangladesh imports nearly $70 billion annually, of which energy imports constitute the major share. The Bangladeshi taka has depreciated by over 25 per cent against the US dollar since 2022. The country has already experienced the COVID-19 pandemic, the post-COVID period, and the Russia-Ukraine war, and their impacts were significant. Many people lost their jobs, survived on savings, and the cost of doing business rose due to taka depreciation and tight liquidity in the banking sector. Companies could not open letters of credit (LCs) due to foreign currency shortages. All these were experienced recently. Before fully recovering from these shocks, Bangladesh's economy may not be ready for another major disruption.

When taken as a whole, these interrelated dangers demonstrate that Bangladesh's problem is not limited to the management of crises that are temporary in nature. The architecture of its supply chains must be redesigned. In the course of several decades, global supply chains were developed with efficiency in mind. Businesses and nations concentrated their efforts on lowering costs and decreasing inventory. However, pandemics and global battles have proved that efficiency is no longer enough. From now on, resilience must rule.

A strong supply chain needs various features. Strong finances help enterprises and governments weather price shocks. Governments, corporations, and logistical providers can coordinate disaster responses. Even with problems, exports continue due to fast and reliable ports and transportation networks.

Visibility also matters. Real-time product flow, energy, and logistical data speeds decision-making. Continuous advancements provide supply network flexibility. Sustainability decreases dependency on unpredictable fossil fuel markets, while strong employment rules protect logistics workers.

Service excellence, the ability to reliably deliver goods to foreign buyers, is still the ultimate test of supply chain efficiency. Therefore, the current tensions in the Gulf should be regarded as a strategic warning. Global integration has been the foundation upon which Bangladesh's economic prosperity has been built; nevertheless, this integration also creates vulnerability to geopolitical concerns that are further away. In the absence of increased supply chain resilience, future disruptions will continue to have a ripple effect on energy markets, export logistics, and domestic demand.

It is necessary not only to handle the current crisis but also to make preparations for the next disruption. The transformation of Bangladesh's vulnerability into long-term competitiveness can be accomplished by the diversification of energy sources, the development of logistics infrastructure, the improvement of supply chain visibility, and investment in robust systems.A nation's economy may ultimately be determined by the strength of its supply chain, which is becoming increasingly important in a world that is becoming increasingly unstable.

With over $30 billion in annual remittances, $47 billion in garment exports, and more than 80 per cent of its fuel imported through Gulf energy corridors, Bangladesh's economic stability is closely tied to the security of Middle Eastern trade routes.

Dr Ferdoush Saleheen, Head of the Department of Maritime Logistics and Supply Chain Management at Sharjah Maritime Academy, UAE. ferdoushsaleheen@gmail.com. Dr Md Mamun Habib, is a Professor and Head of Department of Management at the School of Business and Entrepreneurship (SBE), Independent University, Bangladesh​

 

[Saif]

Time to strategise the long-term cost of energy stability

Amid the ongoing Middle East crisis, Bangladesh has so far largely avoided an energy shock.

www.thedailystar.net

Time to strategise the long-term cost of energy stability

Tasneem Tayeb

Vehicles wait in long queues to purchase fuel at a refilling station in Kalshi Road, Mirpur, Dhaka on March 29, 2026. PHOTO: PALASH KHAN

Amid the ongoing Middle East crisis, Bangladesh has so far largely avoided an energy shock. Supply has been maintained through imports and stock management, enforcement against hoarding has been visible, and prices have remained stable. This is not incidental but the reflection of a deliberate effort by the government to contain immediate pressure and keep conditions manageable, and for now, it is working. But stability under these conditions comes with trade-offs, for it is not being secured; rather, it is being financed, deferred, and redistributed across the system.


The current approach reflects a calculated choice. Supply and price stability is being prioritised. The last major price adjustment in 2022 moved quickly through transport, production and household budgets. Inflation followed and lingered. That experience has left a lasting imprint on the economy, its rippling effects still visible in prices and household budgets. There is limited space for another abrupt correction.

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The country’s energy system depends, in part, on imported liquefied natural gas (LNG). When global prices rise, the cost of securing supply rises with them. Maintaining continuity under those conditions requires additional intervention, and that carries a cost of its own. It is absorbed within the system, including through external financing.

Bangladesh is under a programme with the International Monetary Fund (IMF) amounting to roughly $5.5 billion, disbursed in phases, aimed at supporting external balances, fiscal stability, and policy reform. In addition, the Asian Development Bank (ADB) and other partners have also extended support, including policy-based loans. While these are not designed to finance energy imports directly, they create fiscal constraint at a time when energy-related costs are rising. More recently, the government has sought over $2 billion in additional financing linked to fuel and LNG purchase.


Bangladesh continues to rely on the spot LNG market to meet part of its demand. Spot purchases are volatile: prices move quickly during supply disruptions and cargoes secured at higher rates add to the cost. External financing can only absorb that pressure for a certain period. It lingers in the shadows of crisis management, gathering weight over time until it emerges unannounced in forms the system is not designed to absorb.

Foreign exchange reserves, the gross amount standing at around $30-35 billion as of February 24, 2026, provide some room. But that room provides buffer space only while inflows, particularly from exports and remittances, keep pace with external payments. Energy imports are among the first to draw on it. Part of that cost is absorbed within fiscal space, sometimes through subsidies, sometimes through state-linked entities carrying losses. These don’t always appear immediately in headline figures, but they build gradually. What is changing is how that pressure accumulates and is distributed through the system.

Per a recent report by this daily, fuel prices have been kept unchanged for several consecutive months even as import costs have risen sharply. In March alone, the government covered over Tk 5,000 crore in subsidies, with diesel import cost rising to Tk 198 per litre, nearly double the retail price of Tk 100. That gap will not disappear, but will eventually move into public finances, and from there into the taxation system.


One may recall that exports have softened in recent months, with Bangladesh recording a 1.9 percent year-on-year decline in export earnings during the July-January period of the current fiscal year, alongside weaker RMG shipments to key EU markets—around four percent—during the same period.

At the same time, logistics disruptions linked to the Middle East crisis have affected cargo movement through key routes. More than half of the country’s air cargo is routed through Gulf hubs, leaving it exposed to interruption involving major regional carriers. As capacity has tightened, freight costs have risen sharply. Air freight rates from South Asia to Europe have increased by up to 70 percent, reaching around $4.37 per kg, with some exporters reporting even higher costs as shipments are rerouted or shifted from sea to air. Shipping lines have also introduced fuel surcharges and war-risk premiums, while longer diversions have extended delivery timelines. For a system built on cost discipline and reliability, that matters.


Part of the pressure is already embedded within the system. Payments for installed power capacity that is not always utilised continue to add to the overall burden. Recent estimates suggest that, taken together, these overlapping pressures—from energy imports to structural costs within the power sector—are adding hundreds of millions of dollars in monthly obligations. The same set of pressures is now working through both sides of the external account. Higher import costs increase demand for foreign currency. Softer exports and rising logistics costs weaken inflows. Remittance flows from the Middle East carry their own uncertainty.

Bangladesh has seen similar phases before. External financing has provided breathing space during periods of stress, often tied to expectations around revenue mobilisation, pricing discipline, and stronger financial governance. Those expectations are not new. Meeting them has proven difficult to sustain, particularly where the adjustment moves through households and the formal economy.

Revenue has historically been harder to manage than it appears to be. Bangladesh’s tax-GDP ratio remains among the lowest in comparable economies, hovering around seven to eight percent in recent years. Efforts to expand it continue to face structural constraints, including a narrow base and heavy reliance on indirect taxes. When pressure builds, the response tends to follow the easier path. Rather than widening the base, the system leans more on those already within it—through tighter enforcement and greater reliance on indirect taxation, including VAT and supplementary duties.

The burden does not spread evenly. It falls more heavily on individual taxpayers, compliant businesses, and consumers already within the system, while large segments remain outside effective coverage. Indirect taxes, by design, apply uniformly across transactions. In practice, that uniformity does not translate into socioeconomic equity. That raises costs within the formal economy without necessarily improving the overall resilience. Over time, this approach tightens the system, rather than strengthening it. The pressure shifts again—into margins, into pricing, and into parts of the economy where it is less visible but still felt.

What this points to is not a policy gap but a structural one. Stability cannot be managed reactively. It depends on knowing where the cost sits and how it is carried over time. Without that strategy, stability risks becoming a way of holding pressure in place rather than resolving how it is managed sustainably.

The current approach has kept conditions stable for now, at least on the surface. But it also risks something closer to Friedrich Nietzsche’s idea of recurrence, where what is unresolved does not disappear; it returns, again and again, in the same form. The current trade-off cannot hold indefinitely. It is high time to strategise how the cost is absorbed and where, accepting that the economy will be pressured, while keeping the impact as contained as possible.

Tasneem Tayeb is a columnist for The Daily Star.​