Bangladesh faces a projected $4.8 billion increase in annual fossil fuel imports, marking a 40% surge from 2025 levels due to the Middle East crisis, as per Zero Carbon Analytics (ZCA). The crisis, reminiscent of past shocks, highlights the country’s reliance on fossil fuels and delayed energy transition, impacting its economy.
The Russia-Ukraine conflict led to an economic crisis in Bangladesh, with GDP recovery expected only by 2025. The surge in Asian liquefied natural gas prices pre-invasion resulted in power shortages, with blackouts affecting 130 million people in October 2022.
The ongoing Middle East conflict threatens to strain Bangladesh’s foreign exchange reserves, reducing its import cover ratio. The country’s heavy dependence on energy imports, with 46% of total supply and 65% of power needs coming from imports, exposes its vulnerability to volatile global energy markets.
Bangladesh’s energy sector faces supply disruptions, with shipping issues in the Strait of Hormuz impacting crude oil imports. The suspension of LNG production and shipments by Qatar, a major supplier, is adding to fiscal distress in the power sector.
