Iran peace hopes lift Dhaka’s fuel outlook

Bangladesh hopes Democratic control of the US Congress will increase pressure on President Donald Trump to end the Iran conflict, easing global energy prices and the country’s growing fuel import bill. 

Experts caution, however, that relief will depend on progress in the Middle East rather than on politics in Washington.

Democrats have won both the House of Representatives and the Senate in the midterm elections. This could bring closer scrutiny of the administration’s handling of the war, living costs and trade policy. 

An end to the conflict could restore energy supplies through key shipping routes, lower oil and gas prices and ease pressure on Bangladesh’s economy.

Energy expert Dr Ijaz Hossain told Daily Sun the result could encourage Trump to look for a way out of the war as congressional pressure increases. 

He said Democrats would urge the president to reconsider his position and move towards ending the conflict, while Trump might seek to withdraw in a way that protects his political standing.

Ijaz Hossain said international energy prices might not return immediately to pre-war levels. Lower fuel costs would be Bangladesh’s most immediate gain, he said, with changes in US trade policy offering additional benefits.

Pressure, but presidential powers remain

Control of both chambers gives Democrats greater influence over legislation, government spending and oversight. They can investigate administration policies and examine the costs and consequences  of the Iran conflict.

 The result does not, however, curtail Trump’s constitutional powers. He retains considerable authority over foreign policy and military operations, while Congress can exert influence through legislation, funding decisions and hearings. The new majority could make it politically harder for the administration to sustain a costly, prolonged engagement without facing questions at home.

For Bangladesh, the impact is indirect. Political developments in Washington may shape the diplomatic climate, but a sustained fall in energy prices will depend chiefly on progress in the Middle East.

Markets remain volatile

Energy markets remain sensitive to developments involving Iran, particularly the risk of disruption to shipments through the Strait of Hormuz, which carries a substantial share of internationally traded crude oil and liquefied natural gas (LNG). 

Prolonged disruption can tighten supplies and push up prices, particularly for energy-importing countries in Asia.

According to international media reports, Brent crude fell 1.44% to $102.11 a barrel on Wednesday, while US West Texas Intermediate declined 0.93% to $95.20. A short-term fall does not guarantee a sustained one, as disrupted Gulf supplies, uncertain shipping routes and higher freight and insurance costs remain concerns. A lasting reduction would require diplomatic progress, lower military tensions and the restoration of normal shipments.

Rising import burden

Bangladesh is particularly exposed because it relies heavily on imported crude oil, petroleum products and LNG.

Bangladesh Bank’s commodity-wise import data show the country spent $10.63 billion on crude oil and petroleum products in FY2025-26, more than double the $5.14 billion of the previous fiscal year. This accounted for around 14% of total merchandise imports. Letters of credit opened for petroleum and petroleum products reached about $3.7 billion in July-September of FY2026-27, against $2.28 billion a year earlier.

Bangladesh Petroleum Corporation (BPC) Chairman Dr Md Rafiqul Islam said recently that the corporation incurred additional costs of around Tk23,000 crore between March and August 2026 because of higher international fuel prices and freight charges.

Gas supply costs have also risen with growing reliance on imported LNG. Some spot cargoes have cost nearly $30 per million British thermal units (MMBtu), compared with $10-$12 before the conflict. Petrobangla data show the government released Tk10,300 crore in LNG subsidies in the first three months of FY2026-27. The average import cost was Tk46.40 per cubic metre, against a domestic selling price of Tk23.90.

Potential gains

A sustained fall in oil prices would reduce the foreign currency needed to import crude and refined products, easing pressure on BPC and on the government’s cost of supporting domestic fuel prices. Cheaper LNG could lower spot-cargo costs and ease Petrobangla’s finances. Transport, agriculture and manufacturing, where diesel and gas are essential inputs, could benefit through lower production and transport costs, easing inflationary pressure and reducing demand for foreign currency.

The World Bank has approved an additional $350 million to help Bangladesh manage fuel-market volatility, support LNG imports through Petrobangla and strengthen energy security. It has also stressed the importance of securing longer-term supplies and reducing dependence on costly spot purchases.

The benefits would nonetheless depend on import volumes, exchange-rate movements, existing supply contracts and how quickly lower international prices feed into domestic costs.

Supply security remains a challenge

Even if global prices fall, Bangladesh will remain exposed to overseas disruptions, which can affect cargo availability, shipping schedules, freight charges and insurance premiums. Diversifying import sources, expanding storage, improving domestic gas exploration and developing alternative energy remain essential to long-term energy security.

Ijaz Hossain said an end to the war could lower international prices and offer Bangladesh much-needed relief, but the election result alone could not guarantee peace or stable energy markets. Even a moderate, sustained decline in global oil and gas prices could make a meaningful difference to the import bill, public finances and energy security, he said.