Experts and economists have said that the ongoing conflict in the Middle East is already transmitting significant economic shocks to Bangladesh, affecting fuel supplies with higher prices, raising the cost of exports, and slowing remittance inflows.
They have warned that the fallout could dampen gross domestic product (GDP) growth, squeeze incomes, push up inflation, and threaten food security, while also depleting foreign-exchange reserves and narrowing fiscal space, ultimately undermining the macroeconomic stability.
These warnings came on Sunday at a seminar on the economic and societal impacts of the Iran conflict.
The seminar was jointly organised by Voice For Reform and Policy Exchange Bangladesh (PEB) at the BDBL building in the capital's Karwan Bazar.
M Masrur Reaz, chairman and CEO of PEB, delivered the keynote address at the event, which was moderated by AKM Fahim Mashrur, co-coordinator of Voice For Reform.
Shams Mahmud, former president at Dhaka Chamber of Commerce and Industry (DCCI); Shamim Ahmed Chowdhury Noman, former secretary general at Bangladesh Association of International Recruiting Agencies (BAIRA); international relations expert Professor Dr Shahab Enam Khan; and energy specialist Shafiqul Alam spoke at the event, among others.
Masrur said the Middle East conflict was already affecting Bangladesh's economy with energy availability and prices were the most immediate concerns.
He said exports were facing initial shocks and remittances were witnessing disruptions, while longer-term impacts could be the most damaging for macroeconomic stability.
Policymakers were now confronted with triple challenges - securing energy imports, maintaining export competitiveness, and ensuring remittance inflows amid a volatile global energy and geopolitical landscape, he added.
He also said Bangladesh relied heavily on Middle East Gulf countries for crude oil and liquefied natural gas (LNG), with 80 per cent of crude oil and around 4 million metric tonnes of LNG imported from Qatar alone.
"Supply disruptions are already evident. QatarEnergy has halted LNG production. Shipments from Saudi Arabia and Oman are experiencing disruptions, while the closure of the Strait of Hormuz has prevented LNG tankers bound for Bangladesh," he explained.
However, diesel supplies - vital for transport and agriculture - were partially sourced from 45 per cent from Singapore and 22 per cent from Malaysia, he said.
These alternative sources provided some buffer, but competition from other countries seeking non-Middle East supplies was driving up prices, he said.
The conflict has exacerbated price pressures, he said.
Diesel benchmarks in Singapore had surged from $83 to $150 per barrel in late February, while Brent crude had climbed back to around $103 per barrel, he said.
Spot LNG prices for Bangladesh have jumped from $10-12 per Metric Million British Thermal Unit (MMBtu) pre-war to $21-28, up from long-term contract rates of $11.
Higher energy prices are expected to strain government finances, with last fiscal year's LNG and crude oil imports already costing Tk 550.00 billion and Tk 650.00-660.00 billion, respectively.
Doubling or tripling of energy prices would increase fiscal pressure and demand additional foreign exchange, potentially weakening macroeconomic stability.
Bangladesh's export sector, particularly garment manufacturing, was facing logistical challenges, Masrur said.
Roughly 52-53 per cent of exports go to the European Union (EU), with North America being another major destination, he said.
Most shipments pass near the Gulf of Aden and Suez Canal, adjacent to the Strait of Hormuz.
Global shipping companies have rerouted cargo via the Cape of Good Hope, increasing freight costs by roughly 30 per cent and transit
times by 10-16 days.
"Bangladesh's foreign exchange reserves are under pressure from rising energy costs and potential drops in remittances," said Fahim.
He warned that a $5?billion increase in oil and gas expenses, combined with an estimated $5-6?billion annual shortfall in remittances, could push reserves significantly below the level left by the Sheikh Hasina government by the end of 2026.
Shams highlighted structural vulnerabilities in Bangladesh's garment sector, saying inefficiencies and ad hoc production practices had left it exposed to shocks.
He warned that the industry's key strength - speed-to-market for low-cost, entry-level products - was under threat.
He added that energy quality issues, including low gas pressure, forced factories to rely on generators or steamers, halting up to 40 per cent of production.
Past shocks, such as US tariffs, wage hikes without price adjustments, and rising energy costs, continued to weigh on the sector, he said.
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