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Due to the ongoing conflict between Iran and the US-Israel alliance in the Middle East, shipping in the Strait of Hormuz has virtually ground to a halt. Although the strait has not been legally closed, commercial shipping has plummeted by almost 90% due to security risks and a lack of insurance coverage.
Leading global shipping companies have suspended all operations through this route. Furthermore, approximately a thousand vessels located within or attempting to enter the strait are currently stranded. Many ships are attempting to navigate by switching off their Automatic Identification System (AIS).
Amidst the ongoing conflict in the Middle East, the Bangladesh government has intensified various strategic measures to ensure stable fuel supply. As part of these efforts, Iran has assured, at the government’s request, that Bangladeshi oil tankers will not be obstructed.
This assurance was provided during a high-level meeting held on Monday (March 10) at the Secretariat, involving Power and Energy Minister Iqbal Hasan Mahmud and Iranian Ambassador to Dhaka, Jalil Rahimi Jahanabadi. Multiple ministry officials confirmed this development to the media.
The Bangladesh Nationalist Party (BNP)’s verified Facebook page also shared this information.
According to meeting sources, Iran currently enforces strict prohibitions on Israeli and US-flagged or affiliated vessels transiting the Strait of Hormuz. In this evolving situation, Bangladesh requested Iran’s cooperation to guarantee safe passage for its oil and LNG tankers.
Iran consented to this, laying down one condition: Bangladeshi fuel tankers must notify Iranian authorities of their position and identity before entering the strait. This measure is intended to prevent any inadvertent incidents.
With leading global shipping companies currently suspending operations via this route, commercial shipping has dwindled by approximately 90%. Due to security risks and the absence of insurance coverage, at least a thousand vessels are presently stuck in this corridor. Many are attempting to navigate by disabling their identification systems, but the risks persist. Nevertheless, Iran’s assurance has brought a sense of relief to stakeholders in Bangladesh’s energy sector.
In response to the Middle East crisis, Bangladesh’s reliance on India for energy and trade is anticipated to grow. Presently, 85% of the trade between the two nations is import-dependent. To manage the situation, 5,000 tons of diesel are scheduled to arrive in Bangladesh today via pipeline from Assam’s Numaligarh Refinery. The government is also planning to import additional diesel from India, anticipating a prolonged crisis.
The Energy Division reported that the country currently possesses sufficient fuel reserves. Just yesterday, a vessel carrying 27,000 tons of diesel reached Chittagong port from Singapore. A further 120,205 tons of fuel are expected to arrive in the country this week aboard four additional ships.
However, international market observation agencies have cautioned that a protracted Middle East conflict could trigger a significant crisis not only in the fuel market but also in the food sector. The government is closely monitoring the situation and has bolstered market oversight.
Meanwhile, Bangladesh plans to propose importing additional diesel from India to stabilize the situation. Five thousand tons of diesel are slated to arrive in Bangladesh today from Assam’s Numaligarh Refinery.
According to BPC (Bangladesh Petroleum Corporation) sources, this diesel is expected to reach Bangladesh via pipeline. Experts believe that a prolonged Middle East conflict could further heighten Bangladesh’s trade dependence on India, particularly in the power and energy sectors.
In light of the Middle East crisis, the government has affirmed that the country holds adequate fuel reserves. Alongside regular market monitoring, the government is meticulously observing the supply status of fuel oil, gas, and LNG.
However, international market monitoring institutions have warned that given the trajectory of the Middle East conflict, a crisis could emerge in the coming days, impacting not only energy products but also food supplies.