The closure of the Strait of Hormuz by Iran amid its escalating war with the US and Israel has raised fresh concerns over liquefied natural gas (LNG) supplies to Bangladesh, which relies heavily on the narrow maritime corridor for its energy imports.
Nearly all LNG shipments from Qatar and Oman destined for Bangladesh transit through the Strait. Officials said there has been no disruption so far, as most scheduled cargoes are already in transit.
But analysts warn that an extended closure could delay cargoes, make gas harder to get in the region, drive up prices and strain the country’s energy security at a time when domestic gas output continues to decline and industrial demand is rising.
Bangladesh now meets nearly 30 percent of its gas demand through imported LNG amid persistent shortages in domestic production.
This year, the government plans to utilise its full regasification capacity of 1,100 million cubic feet per day (mmcfd) for the first time since LNG imports began in 2018. It has also planned to import 115 cargoes, including 59 from the spot market.
Amid the conflict, Oxford Economics has projected LNG prices could rise 30 percent to average about $14 per million British thermal units (MMBtu) between April and June, up from the current $9–10.
In addition, Kpler Insight and Wood Mackenzie have warned that a prolonged closure of the Strait could remove around 86 billion cubic metres of LNG -- about 15 percent of global supply. Such a shock would intensify global competition and force Asian buyers to outbid European markets for US cargoes.
The spike would push Bangladesh’s LNG import bill beyond the projected Tk 57,000 crore for FY26, adding to fiscal pressure and straining the exchequer.
Data from Kpler Insight show that while China and India are the largest importers of Qatari LNG, Bangladesh -- alongside Pakistan -- ranks among the top Asian buyers dependent on the Middle East.
Roughly one-fifth of global hydrocarbons pass through the Strait of Hormuz, the strategic gateway linking the Gulf to international markets. More than half of Bangladesh’s LNG imports in 2025 moved through this chokepoint. In March alone, nine cargoes were scheduled, six of them from Qatar via the Strait.
Mohammad Erfanul Haque, chairman of Petrobangla, told The Daily Star on Monday that four of those six cargoes had already crossed the Strait.
“So there is no risk regarding those cargoes for now,” he said, adding that authorities are in contact with alternative suppliers in case of disruption.
When The Daily Star spoke to the Petrobangla chief, the Strait remained open. Later, Iranian media quoted a senior Revolutionary Guards official as saying it had been closed and that Iran would fire on any vessel attempting to pass.
A senior Petrobangla official said yesterday there is no uncertainty over LNG supply until the third week of this month. Beyond that, any disruption to incoming vessels could tighten supply.
Energy analysts warn that prolonged constraints could hit power generation, fertiliser production and industrial competitiveness, particularly during the summer peak. Think tanks have also cautioned that heavy reliance on LNG imports without boosting domestic exploration or diversifying supply contracts could deepen fiscal vulnerabilities.
The power sector consumes 41 percent of total gas supply, industries 34 percent, households 10 percent and fertiliser 6 percent.
Daily demand stands at around 3,800 mmcfd against supply of about 2,650 mmcfd, including around 950 mmcfd from imported LNG. Ahead of summer, imports were to be raised to 1,050 mmcfd.
Failure to increase imports could limit additional gas allocation to power plants, potentially lowering electricity generation, triggering load-shedding and reducing pipeline pressure for households.
A similar shock unfolded in 2022 after the Russia-Ukraine war disrupted global energy markets. Spot LNG prices surged beyond $60 per MMBtu.
Although Bangladesh bought cargoes at up to $36, it later suspended spot purchases. From July that year, spot imports were halted for seven consecutive months, resulting in gas shortages, reduced power output and widespread load-shedding.
If spot prices spike again, pressure could mount on foreign exchange reserves and retail energy tariffs.
Until 2022, Russia was the world’s largest LNG exporter, but its exports declined sharply following its invasion of Ukraine. The United States is now the largest exporter, followed by Qatar and Australia.
