Iran War Impact: Power sector on alert over potential LNG disruptions
Muhammad Ayub Ali :
Rising tensions between the United States and Iran, though geographically distant, could have significant repercussions for Bangladesh’s already fragile economy, particularly in the energy sector.
The newly elected government faces heightened vulnerability due to the country’s heavy reliance on imported fuel oil and liquefied natural gas (LNG), much of which originates in the Middle East.
According to estimates from the Bangladesh Petroleum Corporation (BPC), current fuel reserves remain at relatively comfortable levels.
Diesel stocks stand at 217,317 tonnes, sufficient for approximately 14 to 15 days of demand. Petrol reserves total 21,705 tonnes, covering around 17 days, while octane stocks of 34,133 tonnes are adequate for about 31 days. Furnace oil reserves amount to 78,278 tonnes, enough to meet nearly two months of demand.
However, challenges persist in the gas sector. Bangladesh’s daily gas demand is estimated at 3.8 billion cubic feet, against supply of around 2.65 billion cubic feet, leaving a substantial shortfall.
Dr M. Tamim, Professor of Petroleum and Mineral Resources Engineering at Bangladesh University of Engineering and Technology (BUET), told The New Nation that Bangladesh is scheduled to receive approximately 25 to 26 LNG cargoes from Middle Eastern suppliers in the coming weeks. He cautioned that these deliveries could face disruption amid the ongoing conflict.
“If the war ends within the next two weeks, the impact on Bangladesh’s energy supply would be limited,” he observed, indicating that a prolonged conflict would pose greater risks.
BPC data indicate that crude oil accounts for around 20 per cent of Bangladesh’s total fuel oil imports. All crude shipments transit the strategically vital Strait of Hormuz.
The remaining 80 per cent comprises refined petroleum products sourced primarily from China, Singapore and Malaysia, where supply risks are considered minimal. Nevertheless, uncertainty continues to surround crude oil imports due to their reliance on the Gulf route.
The LNG sector appears more exposed. Approximately 65 to 70 per cent of Bangladesh’s LNG imports originate from Middle Eastern producers and are transported through the Strait of Hormuz.
Any disruption to this key maritime corridor would significantly heighten supply risks. Concerns have intensified following reports that Qatar temporarily halted LNG production in response to regional hostilities.
According to Petrobangla, existing LNG supplies are secured until 12 March. However, if incoming cargoes are delayed, the gas shortfall could widen towards the end of the month, potentially affecting power generation and increasing load shedding.
BPC annually imports approximately 700,000 to 800,000 tonnes of Arabian Light Crude (ALC) from Ras Tanura in Saudi Arabia.
Under its current shipping schedule, a vessel was due to load 100,000 tonnes of crude between 1 and 3 March. Although the ship has reportedly arrived at the port, loading operations have not proceeded because the refinery remains shut.
While Iran has reportedly permitted vessels to navigate through the Strait of Hormuz, uncertainty persists over whether shipments, once loaded, will reach Bangladesh on schedule via the Gulf of Oman, given prevailing security concerns.
Energy experts warn that a prolonged disruption in supply could adversely affect key sectors of the economy. Agriculture, particularly irrigation dependent on borehole pumps, and the transport sector are viewed as especially vulnerable to fuel shortages.
In response to the emerging risks, an emergency review meeting was held on Wednesday at the Secretariat.
Following the meeting, Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud Tuku directed officials to take precautionary measures aimed at conserving energy and preventing misuse of fuel in order to mitigate potential shortages.
Officials indicated that the government is closely monitoring developments in the Gulf region and assessing contingency options to safeguard energy security should the conflict persist.
