Conflict in the Middle East is compounding the cost of Bangladesh delayed energy transition

Conflict in the Middle East is disrupting critical energy imports to Bangladesh, particularly through the Strait of Hormuz, leading to fuel rationing, power cuts, and industrial shutdowns. ZCA analysis indicates that sustained high prices for oil, gas, and coal could increase Bangladesh's annual fossil fuel import bill by USD 4.8 billion (a 40% increase from 2025 levels), further straining foreign exchange reserves. The document argues that this recurring volatility, echoing the shocks from the Russia-Ukraine war, underscores the urgent need for Bangladesh to pivot toward renewable energy to avoid long-term fiscal distress and energy insecurity.

• Bangladesh's heavy reliance on imported fossil fuels, particularly those passing through the Strait of Hormuz, has left it vulnerable to Middle East conflict. In 2023, 46% of the total energy supply was imported, and by 2024-2025, imports covered 65% of power needs. Disruptions have already delayed an Aramco cargo of 100,000 tonnes of crude oil and affected diesel imports, with 60,000 tonnes of planned March imports deferred or cancelled.
• The energy crisis is severely impacting LNG supplies and electricity generation. 75% of LNG imports come from Qatar, which suspended shipments following the war. Consequently, 23% of power plants are currently inoperable due to gas shortages, leading the government to impose power cuts and temporary university closures.
• ZCA analysis predicts that if current elevated prices for oil, gas, and coal persist for one year, Bangladesh's annual fossil fuel import bill will rise by USD 4.8 billion, representing a 40% increase over 2025 levels and 1.1% of 2024 GDP. This would reduce the country's import cover ratio from 5.7 to 4.9 months.
• The energy shortage is causing significant industrial disruption, including the shutdown of four out of five fertiliser factories in early March and power cuts of up to five hours a day for the garment industry, which also lacks sufficient diesel for back-up generators.
• Despite repeated crises, including the Russia-Ukraine conflict which left 130 million people without power in October 2022, renewable energy growth has stagnated at around 2% of the energy mix between 2020 and 2023. To meet its 2030 goal of 20% renewables, Bangladesh must deploy 760 MW annually from 2026, but only 358 MW was in the construction pipeline as of February 2026.

APA

Nicol, J. (2026). Conflict in the Middle East is compounding the cost of Bangladesh delayed energy transition. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/conflict-in-the-middle-east-is-compounding-the-cost-of-bangladesh-delayed-energy-transition/

Chicago

Nicol, Jessica. Conflict in the Middle East is compounding the cost of Bangladesh delayed energy transition. Zero Carbon Analytics, 2026. https://zerocarbon-analytics.org/energy/conflict-in-the-middle-east-is-compounding-the-cost-of-bangladesh-delayed-energy-transition/.

Wikipedia

{{cite report |last1=Nicol |first1=Jessica |title=Conflict in the Middle East is compounding the cost of Bangladesh delayed energy transition |publisher=Zero Carbon Analytics |date=17 March 2026 |url=https://zerocarbon-analytics.org/energy/conflict-in-the-middle-east-is-compounding-the-cost-of-bangladesh-delayed-energy-transition/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nicol2026conflict, author = {Nicol, Jessica}, title = {{Conflict in the Middle East is compounding the cost of Bangladesh delayed energy transition}}, institution = {Zero Carbon Analytics}, year = {2026}, month = mar, url = {https://zerocarbon-analytics.org/energy/conflict-in-the-middle-east-is-compounding-the-cost-of-bangladesh-delayed-energy-transition/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }