Energy crisis hits Bangladesh and Pakistan amid Gulf disruptions

Energy shortages linked to disruptions in the Gulf are causing significant economic and domestic hardship in Bangladesh and Pakistan. The crisis stems from disrupted oil and gas exports through the Strait of Hormuz following attacks by the United States and Israel on Iran, as well as fighting between Saudi Arabia and Iran-backed Houthis threatening Red Sea trade routes.

In Bangladesh, where more than 40% of electricity is derived from imported LNG, the shortfall has led to blackouts and factory shutdowns. The country has been forced to seek more expensive cargoes on the spot market due to supply disruptions from Qatar.

In Pakistan, the government has introduced a fuel subsidy to mitigate rising petrol and diesel prices, but the program has faced implementation challenges. Residents have reported difficulties with the registration process required for vehicles and mobile phones.

Global energy markets are feeling the impact, with Asian spot liquefied natural gas prices rising toward $30 per million British thermal units, up from approximately $10 prior to the conflict. Shell estimates that approximately 36 million tonnes of LNG have been lost from the Middle East so far this year.