Crude stock runs low at Eastern Refinery

Rising tensions in the Middle East and uncertainty surrounding the Strait of Hormuz have begun to affect crude oil supplies to Bangladesh’s only state-owned refinery, the Eastern Refinery Limited (ERL).

Officials said the refinery in Chattogram currently has around 100,000 tonnes of crude oil in stock, enough to sustain production for another 20 to 22 days at most.

If no new shipment arrives within this period, pressure could build on the refinery’s production system.

Energy sector sources said a tanker carrying about 100,000 tonnes of crude oil—valued at roughly Tk 6 billion—has been stranded for the past seven days at Ras Tanura port in Saudi Arabia.

Due to heightened security risks in the Strait of Hormuz amid the ongoing Middle East conflict, the vessel has not yet been able to begin its voyage to Bangladesh.

According to sources at Bangladesh Petroleum Corporation (BPC), the tanker, named Nordic Pollux, was loaded with Arabian Light crude oil on 3 March.

Although the vessel initially departed the port, it later returned to the outer anchorage due to security concerns and remains there.

Another shipment of crude oil was scheduled to arrive later this month.

The tanker Omera Galaxy was expected to load around 100,000 tonnes of crude oil from Jebel Dhanna port in the United Arab Emirates between 20 and 21 March.

However, the shipowner has shown reluctance to send the vessel to the region under the current security situation.

The chartering company has already requested a delay of about 10 days in the shipment schedule.

In response, officials are exploring alternative options, including sourcing crude oil from Fujairah port, which lies outside the Strait of Hormuz.

However, they said securing berthing facilities there, arranging supply logistics and covering additional transportation costs could pose challenges.

Refinery sources said ERL has a total storage capacity of about 225,000 tonnes of crude oil.

At present, the refinery holds around 100,000 tonnes in stock. With a daily refining capacity of approximately 4,500 tonnes, the current reserves could support operations for nearly three weeks.

Officials said this volume of crude oil could produce roughly 40,000 tonnes of diesel, 15,000 to 20,000 tonnes of petrol and octane, and around 30,000 tonnes of furnace oil.

Bangladesh’s energy sector remains heavily dependent on imports.

According to data from Bangladesh Petroleum Corporation, about 92 per cent of the country’s petroleum fuel demand is currently met through imports, while only around 8 per cent comes from domestic sources.

Most of the locally produced fuel is derived from condensate extracted from gas fields, which is processed to produce petrol and octane.

Bangladesh’s annual demand for petroleum fuel stands at around 7.2 million tonnes. Of this, only about 1.5 million tonnes of crude oil are imported for refining at Eastern Refinery.

Plans to build a second refinery have been under discussion for many years.

However, slow progress in implementing the project has prevented any significant increase in domestic refining capacity, leaving limited scope to reduce dependence on imported fuel.

A large share of Bangladesh’s crude oil imports comes from several Middle Eastern countries, including Saudi Arabia, the United Arab Emirates and Kuwait.

Most of the crude oil is imported under long-term agreements with these countries.

Regional tensions escalated again on 28 February after the United States and Israel launched strikes in Iran. The situation intensified further following retaliatory attacks by Iran.

At the centre of the conflict lies the Strait of Hormuz, a strategic maritime corridor in the Persian Gulf through which a significant share of the world’s oil and large volumes of natural gas are transported.

The route is particularly crucial for Bangladesh, as most of the crude oil imported from the Middle East passes through the Strait of Hormuz.

BPC officials said Bangladesh imports about 700,000 to 800,000 tonnes of Arabian Light crude oil annually from Saudi Arabia’s state-owned energy company Saudi Aramco through this route.