In the weeks since the United States and Israel launched their military campaign against Iran, tanker traffic through the Strait of Hormuz has become more perilous, and the shock has hit Bangladesh particularly hard. The nation of more than 170 million people imports nearly all of its oil and gas. Pump prices have climbed, queues at filling stations have lengthened, and incomes for the millions who depend on fuel have fallen sharply.
Tariqul Islam, a 53-year-old father of four in Dhaka, lost his clothing business about a year and a half ago and turned to ride-sharing on his motorbike to support his family. “But after the fuel shortage began, I would buy fuel one day and run the bike for two days,” he said. “As a result, I had to sit idle for one day, which reduced my income.” Islam said that if the crisis persists, his family may be forced to return to their village. “It is not possible to survive in Dhaka by doing ride-sharing under these conditions,” he said.
The strains radiate across the economy. The Asian Development Bank in late April cut its 2026 growth forecast for developing Asia and the Pacific to 4.7% and warned that inflation would climb to 5.2% as oil prices rise and financial conditions tighten. The World Bank said it now expects Bangladesh’s growth to slow to 3.9% in the fiscal year ending June 2026, with higher energy subsidies widening the current account deficit and straining public finances. “The rising costs are obviously making the fiscal situation more difficult,” said Jean Pesme, the World Bank’s division director for Bangladesh and Bhutan. He also cautioned that raising fuel prices further could hurt farmers and agriculture.
To manage the crunch, the government has imposed austerity measures: office and mall hours have been cut, fertilizer factories have been shut to divert gas to power plants, and fuel rationing has been introduced. Authorities expect to spend an additional $1.07 billion on liquefied natural gas subsidies in the April–June quarter alone if global prices remain elevated.
The energy crisis is also reverberating through Bangladesh’s garment sector, the backbone of the economy. Anwar-Ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, said export shipments to Europe and the United States have fallen between 5% and 13% in recent months, while factory output has dropped by 30% to 40% for various reasons. Business costs have risen by about 35% to 40%, he said, and he worries that competitor nations such as India, Vietnam and Cambodia could capture market share if the disruption continues.
Alvi Islam, director of Arrival Fashion Limited, said manufacturers are paying more for petroleum-based materials such as sewing threads, poly bags and cartons, while spending extra on diesel generators to cope with frequent power cuts. His company, which exports roughly $40 million worth of products annually, now runs generators at least four hours a day during production. “For that reason, the cost of doing business for exporting garments has increased quite significantly in past one month,” he said.
The squeeze is felt acutely on the factory floor. Mosammet Runa, a 35-year-old garment worker, supports a family of six with her husband, together earning about $400 a month. “Millions of people like us depend on this industry. It is how we survive,” she said. “We are innocent people. The world should not make us victims.”
Bangladesh, the world’s second-largest garment exporter after China, earns about $39 billion annually from the sector, which employs around 4 million workers, mostly women from rural areas. The government has sought fuel supplies from neighboring India, which has responded positively as it has diversified its own sources of oil and gas. But with no quick end to the war in sight, the pressures on households, exporters and the public purse are likely to keep building.