Time for Bangladesh to Consider Alternative LNG Sources

Since late July, Bangladesh has been experiencing an acute gas crisis, resulting from a technical glitch at one of the liquefied natural gas (LNG) terminals in Cox’s Bazar. The shortage of LNG has paralysed households, industries and transportation, with people failing to cook food, restaurants struggling to serve customers and industries discontinuing production. Although technical glitches can be attributed to such a situation, a bigger picture portrays disruption to LNG supplies from Gulf countries like Qatar due to a blockade on the Strait of Hormuz as a consequence of the US-Iran War as the underlying reason for the crisis.

Blockade on the Strait means LNG vessels cannot pass through it and reach their destinations on time, resulting in a shortage in cargoes, pushing countries like Bangladesh to increase LNG prices domestically and reduce their supply. Supply shortages and high LNG prices are crippling the economy through an extra burden on people's incomes, forcing industries to halt production, increasing unemployment and decreasing the share of Gross Domestic Product (GDP) through reduced export earnings. The transport sector is also suffering, as vehicles running on gas are reducing trips and charging higher fares. As long as Bangladesh depends on LNG coming from the Middle East, these crises have the potential to repeat again and again, even after the US-Iran War ends. Does Bangladesh have any alternatives?

The answer is yes. Bangladesh sees the Middle East as the primary source of oil and gas. A recent report by Oil Price has shattered this illusion. According to the report, the United States has emerged as the new LNG superpower, surpassing Qatar and Australia. In 2025, the US supplied around 1.1 trillion MMBtu of LNG, equalling almost 93% of the increased LNG demand. The rise of the US in the global energy market happened over the years, as their export share was nearly nil just 10 years ago. Already existing pipelines and energy infrastructures along the Gulf coast and exploration of new gas wells in the American heartland helped the US secure a major share in global LNG supply.

The problem with US LNG is its high prices. Qatar sells LNG to Bangladesh at a price of around $10 per MMBtu, while the price of US LNG is almost triple, which is around $28 per MMBtu. Such a high price recently prevented Bangladesh from reaching a long-term deal with Gunvor Group, a US-based LNG export company. Although the US has large reservoirs of LNG, their export has been limited to Europe only, as continents like Africa, Asia and South America have not considered buying American gas yet due to the high price tag.

The same rules apply to Bangladesh, and the country is at a crossroads and must decide whether it should meet domestic energy demands by pricy US LNG or expect an end to global conflicts like the US-Iran War and wait for a delayed LNG supply from Qatar and Oman, leaving households, industries and the transport sector in complete disarray.

If Bangladesh waits for Gulf countries to send their LNG cargoes without any specific timeframe, the country risks falling into instability and economic crises like inflation, unemployment and increased expenditure per household. On the other hand, buying LNG from the US might prevent Bangladesh from experiencing energy insecurity, but it will also increase the cost of living and inflation. 

However, if Bangladesh buys LNG from the US, there are chances that it might help the country in securing lucrative trade deals from Donald Trump’s administration, as President Trump is all about selling American products to foreign countries as much as he can. The first thing that Bangladesh might get will be a relief from the high tariffs imposed on imported goods by Trump, which will help Bangladeshi industries to sell their goods without any financial barrier. Buying LNG from the US might also help Bangladesh to secure foreign direct investments from American companies, which will help Bangladesh to establish new industrial units and diversify its export basket. If Bangladesh goes into a trade deal over LNG supplies with the US, top energy companies like ExxonMobil and Chevron might help Bangladesh to search for offshore gas sources in the Bay of Bengal, increasing the country’s potential to rely on domestic gas reserves. Moreover, as blockades on the Strait of Hormuz are creating energy insecurity in Bangladesh, unlimited supply from the US might help the country to offset its energy challenges.

Bangladesh has taken that option. We shall have to wait and see what it brings.
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The writer is a Sub Editor at Daily Sun. He can be reached at [email protected]