The escalating military conflict between Israel and Iran is already disrupting global markets, triggering a surge in oil and gold prices and sparking fears over international trade stability. Bangladesh, with its economy deeply tied to exports and Middle Eastern labor markets, faces significant potential fallout, warn leading economists and industry figures.
"Any war or conflict impacts the global economy—transport and oil prices rise, disrupting the flow of goods and increasing operational costs," said Mahmud Hasan Khan Babu, the recently elected President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). “Exporters go into survival mode, waiting for clarity.”
Babu, also managing director of Rising Group, stressed that conflict in maritime trade arteries—like the Strait of Hormuz or the Suez Canal—would raise shipping costs and delay deliveries, endangering Bangladesh's readymade garment (RMG) sector.
Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, warned the ripple effects could heighten inflation. “Global oil price hikes will push up domestic production and living costs,” he noted.
Dr Masrur Reaz, chairman of Policy Exchange Bangladesh, highlighted the vulnerability of global oil routes. “The Strait of Hormuz handles about 25% of global oil trade. If that is compromised, the impact on global energy markets will be severe,” he said. “Threats from Iran-backed groups to the Suez Canal also endanger a vital shipping corridor.”
He pointed to last year’s disruptions by Yemen’s Houthi militants in the Red Sea, cautioning that a repeat could sharply raise shipping costs and delay exports. Reaz also noted that economic uncertainty in the Gulf could suppress demand for Bangladeshi labor, a key source of remittance.
Mohiuddin Rubel, managing director of Bangladesh Apparel Exchange and additional managing director of Denim Expert Ltd, called the conflict a geopolitical shock with far-reaching effects. “Middle Eastern countries produce a third of the world’s crude. If routes like Hormuz are blocked, Brent crude could rise to $120–$130 a barrel,” he said.
Rubel added that if the Suez Canal is affected, cargo vessels may have to reroute via the Cape of Good Hope—adding nearly two weeks of travel time and boosting per-container shipping costs by 30% to 40%. “This could severely strain exporters,” he warned.
The combined pressure of higher costs, delayed shipments, and falling consumer demand could lead global buyers to cancel or postpone orders, hurting production and revenues in Bangladesh.
“We urge global leaders to de-escalate tensions immediately,” Rubel said. “But we must also be cautious. Reacting to a few days of conflict could be premature.”
As global uncertainty deepens, Bangladesh’s export-reliant economy stands at a critical juncture, with business leaders closely watching developments in the Middle East.
Bd-pratidin English/ Jisan
