The standoff between the US and Iran on the Strait of Hormuz has settled into a form of maritime trench warfare, in which each side is betting that economic pressure will eventually persuade the other to yield. Tehran has also demanded tolls of more than a million dollars per vessel for safe passage — an innovation that risks setting a precedent for every chokepoint the world has long treated as free. The latest US naval blockade has upped the ante, resulting in a situation where neither side can agree to end this war without having to give something up. This is a classic example of a zero-sum game, preventing anyone from coming to a resolution.
The Islamabad talks ended without agreement, and the likely endgame is not a clean peace deal but a patchwork of partial deals across the major issues at stake. The current stalemate has begun to shift expectations across the world’s capitals. Governments and energy ministries are no longer planning around a brief disruption; they are preparing for a war that may last considerably longer than first imagined, with the Strait remaining contested for many months. As that assumption hardens, multilateral coordination becomes the casualty. Every nation begins finding its own way, and the cooperative instruments that might have shortened the crisis are quietly set aside in favour of national contingency planning.
When we examine how countries have responded, a clear pattern emerges. NATO declined to help reopen the Strait. The most consequential development is the UAE’s decision to walk out of OPEC and OPEC+ on May 1, after 59 years of membership. Although the cartel had been throttling Abu Dhabi’s production levels, the deeper signal is that no multilateral framework was able to withstand the situation. Every nation is now negotiating for itself, and the UAE is simply the first to admit it openly.
The countries with capital are already adapting in defence of their own national security. Saudi Arabia is rerouting its exports through the East-West pipeline to the Red Sea, allowing Yanbu to absorb a substantial share of what Hormuz can no longer carry. The UAE, in parallel, is pushing crude through Fujairah on the Gulf of Oman, with stated plans to reduce its Hormuz exposure from 50 percent to zero over the next three years. Beyond infrastructure, governments are drawing on strategic petroleum reserves to cushion their domestic markets, accelerating the diversification of supply contracts towards the US, Australia and the African producers, and arranging precautionary credit lines with multilateral lenders. The instinct of the prepared state has been to assume the worst and to act early. That leaves Bangladesh to fend for itself.
After many rounds of discussion in recent years about energy security and the energy transition, the structural answers are familiar enough: a strategic petroleum reserve, a more diversified renewables base, and meaningful refinery upgrades. All of these are worth pursuing, but none of them can be built during the war. The sovereignty argument is a lesson for the next decade, not a solution for the next two quarters.
The solution for this war is diplomacy, and specifically diplomacy with the Global South, where Bangladesh has both standing and unused leverage. The shape of the problem is shared by at least nine other vulnerable importers, including Pakistan, Sri Lanka, Egypt, the Philippines, Kenya, Senegal, Jordan, Morocco and Tunisia. None of these countries holds a meaningful strategic reserve, and none of them was included in the IEA’s 400-million-barrel coordinated stock release on March 11, which was restricted to OECD members. That leaves roughly 80 percent of the world’s population without an emergency backstop, and no coalition has yet formed to ask for one.
The first move is the institution Bangladesh already chairs. We hold the chairmanship of BIMSTEC, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, until 2027, and the secretariat is in Dhaka. All seven member states are net energy importers, and all seven receive their crude and LNG through the same chokepoint. Yet BIMSTEC has issued no statement on the war or the blockade. Within Dhaka’s authority to convene sits an emergency BIMSTEC energy ministers’ meeting, focused on joint LNG procurement and a coordinated call for the Strait to be reopened. India, Sri Lanka, Nepal and Thailand are all rationing energy in some form, and there is strength in numbers, so none would likely refuse the invitation.
The diplomatic ceiling is also higher than the current narrative suggests. The Foreign Minister is presently campaigning for the presidency of the UN General Assembly, with the vote scheduled for June 2. A campaign of that nature benefits from an agenda larger than itself. A Bangladesh-led Vulnerable Importers’ Caucus, asking the IMF, the IEA and the World Bank Coordination Group for a non-OECD emergency stock mechanism and concessional energy financing, is the kind of agenda that earns votes and continues to deliver well after the war ends. It positions Bangladesh as a convener of the Global South rather than a recipient of its sympathies.
The architecture for payments in non-dollar trade already exists, and Bangladesh is inside it. The Asian Clearing Union, headquartered in Tehran with members including Bangladesh, India, Pakistan, Iran and Sri Lanka, can clear sanction-exempt food and medical trade outside the dollar system. Sri Lanka has, in recent years, paid down Iranian oil debt with Ceylon tea, and Pakistan operates a barter framework with Iran for food and medicine. Bangladesh is pharmaceutically self-sufficient, and nine of its firms hold FDA and EMA approvals, which suggests that a pharma-for-petroleum arrangement could be a workable idea worth exploring.
The supplier conversations are already in motion, although they remain tactical rather than strategic. Petrobangla has secured diesel from Malaysia, Singapore and India, taken delivery of a Saudi crude cargo loaded at Yanbu via the East-West pipeline, and received a Nigerian LNG cargo at Moheshkhali on April 22. These are sensible moves made under pressure, but they do not yet amount to a framework. The UAE’s exit from OPEC gives ADNOC the freedom to negotiate bilaterally on price and counter in ways it could not last month, and that window opens this week, which means Dhaka should aim to be present in Abu Dhabi soon. A Pakistan-style deferred-payment facility, structured government-to-government deals with both Riyadh and Abu Dhabi, would deliver more for the government in 60 days than any reserve we could plausibly build in five years.
What is most encouraging is that each of these moves lies well within the capacity that Bangladesh already possesses, and none of them obliges us to choose a side we cannot afford to choose. We maintain functional working relationships with Washington, Beijing, Delhi, Riyadh, Abu Dhabi and Tehran, which is leverage that few countries can claim, and which we have rarely priced into our foreign policy. The countries that emerged from the 1973 oil shock in better shape than they entered it were not the ones with the largest reserves; they were the ones that converted vulnerability into diplomacy quickly and deliberately. The instruments are already in our hands, and the question now is whether we are prepared to use them with the seriousness the moment deserves.
Ayesha Tariq, CFA is CEO and Co-Founder of MacroVisor, a Dubai-based independent macro research firm.
