New Delhi, March 27 (NationPress) Bangladesh's yearly fossil fuel import expenditure is set to escalate by $4.8 billion, marking a 40% increase from 2025 figures, as a result of the ongoing crisis in the Middle East, according to a recent study from Zero Carbon Analytics (ZCA).

The analysts from ZCA noted, "This kind of crisis is becoming a pattern, reminiscent of the price shocks triggered by Russia’s invasion of Ukraine, leading to increased costs for Bangladesh’s reliance on fossil fuels and its sluggish energy transition."

The report highlighted that the conflict between Russia and Ukraine had plunged Bangladesh into an economic downturn, with GDP only beginning to recover in 2025. The price of Asian liquefied natural gas (LNG) surged by 390% in the year prior to Russia's invasion, followed by an additional 48% increase in the five months that followed, resulting in power supply shortages and extensive power outages. In October 2022, 130 million people were affected by blackouts.

This significant financial burden, exacerbated by the continuing turmoil in the Middle East, poses a grave threat to the country's foreign exchange reserves, diminishing its import cover ratio from 5.7 months to 4.9 months.

The crisis underscores Dhaka's profound susceptibility to fluctuating international energy markets, with 46% of the nation's total energy supply sourced from imports in 2023. In the fiscal year 2024-2025, imports are expected to satisfy 65% of its energy requirements.

A substantial portion of this essential fuel transits through the Strait of Hormuz, which is currently experiencing significant shipping disruptions. Bangladesh imports approximately 1.4 million tonnes of crude oil through this route annually, under long-term agreements with Saudi Aramco and the Abu Dhabi National Oil Company.

As highlighted in the ZCA report, a cargo of 100,000 tonnes from Aramco destined for Bangladesh is already facing delays in the Gulf due to the ongoing conflict.

Supply constraints are emerging across various energy sectors. The Bangladesh Petroleum Corporation (BPC) confirmed in early March, "Approximately 60,000 tonnes out of the 293,000 tonnes of diesel scheduled for import in March have been postponed or canceled."

Additionally, Qatar, which supplies 75% of Bangladesh’s LNG imports, has halted production and shipments. This heavy reliance on LNG is causing financial strain throughout the power sector.

According to reports, six out of seven LNG shipments planned for April by the state-owned Petrobangla, responsible for managing oil, gas, and other mineral resources, are projected to navigate through the strait. The delivery of half of the remaining shipments remains uncertain.