
In the complex lattice of global geopolitics, few chokepoints are as strategically consequential as the Strait of Hormuz. This narrow waterway—only 21 nautical miles wide at its narrowest point—funnels nearly 20 percent of the world’s petroleum and a significant portion of liquefied natural gas (LNG) shipments. Nestled between Iran and Oman, the strait has long served as both conduit and conflict zone. As hostilities between Iran and Israel intensify, the specter of a blockade or military confrontation in the Strait of Hormuz threatens not only Middle Eastern security but also energy-importing nations far removed from the region. Bangladesh, a developing nation with an energy-intensive export economy, is among the most vulnerable.
The nexus between energy security and geopolitics is neither new nor geographically confined. As Daniel Yergin notes in The Prize: The Epic Quest for Oil, Money, and Power, control over energy resources and routes has been a central driver of conflict throughout the 20th and 21st centuries. In this context, Bangladesh's reliance on Middle Eastern hydrocarbons—particularly LNG from Qatar and Oman—renders it precariously exposed to disruptions in maritime traffic through the Hormuz corridor. A prolonged closure or militarization of this passage could exert profound pressure on the country’s energy portfolio, economy, and national security.
Structural Vulnerability in Bangladesh's Energy Matrix
Bangladesh’s energy security architecture is heavily tilted toward imported fossil fuels. While the nation has domestic reserves of natural gas, these are rapidly depleting. As Michael T. Klare explores in Blood and Oil, countries lacking indigenous hydrocarbon resources increasingly tie their national security to volatile global supply chains. For Bangladesh, over 25% of its total primary energy supply now comes from imported LNG, much of which transits through the Strait of Hormuz.
The country’s strategic bet on LNG was solidified in 2018 with the operationalization of floating storage regasification units (FSRUs). However, this infrastructural leap, while reducing dependency on depleting domestic gas fields, has simultaneously magnified exposure to geopolitical risks. As Benjamin Sovacool discusses in Energy Security: An Interdisciplinary Approach, diversification in fuel type is not equivalent to diversification in supply route—a nuance too often ignored in energy policy design.
A disruption in LNG deliveries due to a Hormuz conflict could stall industrial production, including electricity generation and fertilizer manufacturing. As Richard Heinberg warns in The End of Growth, economies built on uninterrupted energy supply are particularly ill-equipped to manage shocks. Bangladesh’s heavy industry and RMG sector—together accounting for the bulk of GDP and export revenue—are highly sensitive to fuel price volatility.
Maritime Disruption as an Energy Risk Multiplier
The Strait of Hormuz functions not just as a trade route but as a pressure point in regional politics. According to Naval Power and Energy Security by Howard M. Hensel, naval maneuvering in chokepoints often triggers supply chain bottlenecks, cascading through insurance markets, freight rates, and fuel pricing. As of June 2025, Iran has hinted at the possibility of closing the Strait in retaliation to Israeli airstrikes—a move that could constrict one-fifth of the global oil flow and a significant portion of LNG traffic.
Even the perception of threat can rattle markets. As Meghan L. O’Sullivan elaborates in Windfall: How the New Energy Abundance Upends Global Politics and Strengthens America’s Power, energy markets are sensitive to geopolitical anxiety. Following initial skirmishes between Iran and Israel, Brent crude jumped by over one percent within a single trading session. While Bangladesh does not import oil or gas directly from Iran due to sanctions, it remains entangled in the wider logistics of Gulf-based supply chains.
Moreover, insurance premiums for vessels navigating the Hormuz Strait could skyrocket during periods of heightened tension. This cost—rarely discussed in macroeconomic terms—is ultimately passed on to end-users. As Robert Collier notes in Energy and the World: Geopolitics, Risks, and Security, non-oil-producing nations like Bangladesh are often collateral victims in conflicts that they neither initiate nor influence.
Strategic Inertia and the Policy Gap
Despite the known risks, Bangladesh’s national energy policy lacks a coherent contingency framework for maritime disruptions. While Vision 2041 and the Power System Master Plan have emphasized generation capacity, there has been minimal focus on route diversification or emergency stockpiling. In Energy Security and Global Politics by Daniel Scholten, the author argues that small states often over-prioritize capacity expansion while underinvesting in logistical resilience.
The inadequacy of strategic reserves is a pressing concern. Bangladesh maintains only a few weeks’ worth of LNG and oil in reserve—insufficient in the event of a prolonged Hormuz disruption. Strategic petroleum reserves (SPR), a staple in the energy strategies of nations like India and China, are largely absent in Bangladesh. This asymmetry between infrastructural ambition and logistical redundancy is symptomatic of what Paul Roberts terms "fragile abundance" in his book The End of Oil.
Diplomatic Constraints and Regional Realities
Bangladesh's foreign policy approach—emphasizing neutrality and non-alignment—limits its ability to maneuver in great power politics. While it enjoys cordial relations with both the Gulf Cooperation Council (GCC) countries and Iran, Dhaka has little leverage in the current regional crisis. According to Peter Frankopan in The Silk Roads: A New History of the World, strategic chokepoints like Hormuz are not merely geographic entities but arenas of global power projection.
In such a scenario, Bangladesh must rely on multilateral diplomacy and strategic partnerships to ensure energy continuity. However, regional arrangements such as the South Asian Association for Regional Cooperation (SAARC) have proven largely ineffective in responding to security-linked energy disruptions. As Varun Sivaram observes in Taming the Sun: Innovations to Harness Solar Energy and Power the Planet, multilateral cooperation in South Asia is often more aspirational than operational.
One potential avenue lies in deepening ties with ASEAN energy networks, particularly through LNG swap agreements and integrated grid systems. Yet these remain speculative, and as of 2025, no bilateral or multilateral contingency frameworks have been activated in response to the Middle East crisis.
Economic Implications and Public Finance Stress
A shock to energy imports will cascade into macroeconomic instability. The government’s subsidy burden, already strained by currency depreciation and rising import bills, could become unsustainable if LNG prices surge. According to Joseph E. Stiglitz in Globalization and Its Discontents Revisited, nations like Bangladesh are particularly susceptible to exogenous shocks due to limited fiscal space and heavy reliance on international markets.
Inflationary pressures are likely to follow, further complicating monetary policy. The Bangladesh Bank has already raised interest rates to combat inflation triggered by global supply chain disruptions. A sustained energy shock could deepen stagflation risks—where economic slowdown coexists with rising prices.
Additionally, foreign investors—particularly those in the power and infrastructure sectors—may adopt a wait-and-see approach, thereby slowing capital inflow. This, in turn, could impact employment, particularly in the construction and RMG sectors, both of which are energy-dependent.
Long-Term Reorientation and the Way Forward
In Energy for Future Presidents by Richard A. Muller, the author argues that energy policy must be anticipatory rather than reactive. For Bangladesh, this means rethinking its dependence on a singular maritime corridor for a significant portion of its energy needs. Expanding LNG sources beyond the Gulf—such as considering Australian or U.S. suppliers—could offer long-term stability, albeit at higher transport costs.
Equally important is the development of renewable energy at scale. While Bangladesh has made modest gains in solar energy, its integration into the national grid remains limited. As noted in Renewable Energy: A First Course by Robert Ehrlich, energy diversification must include both technological readiness and institutional robustness. Off-grid solar and biogas systems, if incentivized effectively, could cushion rural and industrial zones during supply disruptions.
In parallel, the country should urgently invest in maritime resilience, including improved port logistics, storage infrastructure, and supply chain analytics. A maritime strategy that integrates energy, trade, and security dimensions could provide a holistic response to regional conflicts.
Conclusion
The current conflict in the Strait of Hormuz, sparked by escalating tensions between Iran and Israel, is not merely a localized affair—it is a crucible of vulnerabilities for energy-importing nations like Bangladesh. The country’s overdependence on a singular energy corridor, combined with limited strategic reserves and fragile policy frameworks, places it in a precarious position. As the energy geopolitics of the 21st century continues to evolve, Bangladesh must abandon its reactive posture and embrace a proactive, multidimensional energy security doctrine.
References
Yergin, D. (2008). The Prize: The Epic Quest for Oil, Money & Power. Free Press.Klare, M. T. (2005). Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum. Henry Holt.
Sovacool, B. K. (2011). Energy Security: An Interdisciplinary Approach. Wiley.
Heinberg, R. (2011). The End of Growth: Adapting to Our New Economic Reality. New Society Publishers.
Hensel, H. M. (Ed.). (2016). Naval Power and Energy Security: The Geopolitics of Energy in the Sea. Routledge.
O’Sullivan, M. L. (2017). Windfall: How the New Energy Abundance Upends Global Politics and Strengthens America's Power. Simon & Schuster.
Collier, R. (2010). Energy and the World: Geopolitics, Risks, and Security. Cambridge Scholars Publishing.
Scholten, D. (Ed.). (2018). Energy Security and Global Politics: The Militarization of Resource Management. Routledge.
Roberts, P. (2004). The End of Oil: On the Edge of a Perilous New World. Houghton Mifflin.
Frankopan, P. (2015). The Silk Roads: A New History of the World. Bloomsbury.
Ehrlich, R. (2013). Renewable Energy: A First Course. CRC Press.