Dhaka eyes energy ties with Moscow
Dhaka is preparing for a possible high-level diplomatic engagement with Moscow as Foreign Minister Dr Khalilur Rahman is expected to visit Russia in June, Dhaka and Moscow sources said.
The planned visit comes at a time when Bangladesh is actively working to revive and recalibrate its multilateral relations with Russia, with a sharp focus on energy security and strategic cooperation.
Officials familiar with the preparations said the discussions are likely to centre on energy cooperation, the Rooppur Nuclear Power Plant, trade expansion, and broader geopolitical realignment.
Russian policymakers are also expected to engage Dhaka on long-term supply arrangements and financial settlement mechanisms amid tightening global sanctions.
At the heart of the talks is Bangladesh’s urgent effort to secure stable and affordable energy imports. Sources in Dhaka, Moscow, and Washington said high global oil prices, delays in shipment commitments, constraints in traditional banking channels, and European Union sanctions on Russian exports have created significant barriers to importing Russian crude.
The limitations of domestic infrastructure, particularly the capacity of the Eastern Refinery, are also affecting Bangladesh’s ability to process certain grades of imported oil efficiently.
Bangladesh Petroleum Corporation (BPC) has already initiated discussions with Russian oil companies to explore import options.
However, officials acknowledged that Bangladesh faces a complex balancing act as it navigates sanctions-related restrictions while trying to secure competitive energy supplies.
Historically, Russian oil had been cheaper than global benchmarks, but that advantage has narrowed due to geopolitical disruptions and payment complications.
Diplomats noted that Bangladesh may need to negotiate a revised payment and compliance framework, as it has not previously imported Russian crude at scale.
The situation is further complicated by Western sanctions, which have reshaped global energy flows and forced countries like Bangladesh to explore special waiver-based arrangements.
The United States recently granted Dhaka temporary permission to import Russian oil for a limited period, a move seen as crucial in easing immediate supply pressures.
The Treasury Department’s approval followed sustained diplomatic engagement from Bangladesh, particularly from officials stationed in Washington.
Dhaka has now sought to extend the waiver for up to three months, arguing that the current global energy shock requires additional flexibility. However, officials estimate that even after procedural clearance, it may take at least a month before actual shipments can begin.
Meanwhile, US Energy Secretary Chris Wright reportedly acknowledged Bangladesh’s energy constraints during recent discussions and expressed Washington’s willingness to support energy stability measures, particularly as global supply chains remain under strain.
In parallel diplomatic developments, Bangladesh Ambassador to Russia Md Nazrul Islam has been actively engaging with Russian energy stakeholders, including senior representatives of major oil companies.
He is also expected to expand consultations with additional firms in the coming weeks to identify suitable crude varieties compatible with Bangladesh’s refining capacity.
A key operational concern for Dhaka remains ensuring that imported crude matches the technical specifications of the Eastern Refinery, which limits flexibility in sourcing.
Officials said that if suitable grades are unavailable, Bangladesh may have to consider third-country processing options, further increasing costs and logistical complexity.
The geopolitical dimension of the energy strategy is becoming increasingly pronounced. Bangladesh is reportedly being advised by diplomats and trade experts to engage with Brussels over Russian oil procurement, given the EU’s sanctions regime.
The EU’s reaction remains a sensitive factor, especially as Bangladesh maintains strong economic ties with Europe.
Bilateral trade between Bangladesh and the EU stood at around €22 billion in 2024, with Bangladesh’s exports accounting for roughly €20 billion of that total, underscoring the importance of maintaining stable relations with European partners.
Officials also noted that EU pressure to narrow the trade imbalance continues alongside concerns over secondary sanctions and compliance risks related to Russian energy imports.
Finance Minister Amir Khasru Mahmud Chowdhury has highlighted the growing fiscal burden created by volatile global energy markets.
He estimated that Bangladesh may require approximately Tk 36,000 crore in additional subsidies for oil and LNG imports between March and June of the current fiscal year, driven largely by conflict-related disruptions in the Middle East and rising global prices.
In Washington, Bangladeshi officials have also raised concerns about energy security during critical agricultural periods, warning that any disruption in fuel supply could affect planting cycles and threaten food security.
US officials, while recognising these concerns, have reiterated their interest in ensuring stability in global energy markets and supporting Bangladesh’s economic resilience.
Beyond Russia and the United States, Dhaka is also expanding outreach to Central Asia. Ambassador Md Nazrul Islam recently met the President of Kazakhstan Kassym-Jomart Tokayev and discussed areas of mutual interest, including energy cooperation.
He also held talks with Kazakhstan’s Energy Minister Erlan Akkenzhenov to explore potential collaboration in the sector.
As Bangladesh positions itself within a rapidly shifting global energy landscape, officials say the coming weeks will be critical.
The combination of waiver timelines, refinery constraints, geopolitical pressure, and rising subsidy costs is pushing Dhaka to accelerate decisions that could define its energy strategy for years to come.
