Middle East conflict and its cascading effects on Bangladesh’s energy security, labor market, and foreign policy options
“As long as instability in the Middle East continues, we need to keep assessing our vulnerabilities and thinking about contingency plans. Where possible, we should conduct comparative analyses and, if financial capacity allows, gradually move toward diversification to reduce our strategic risks.”
Ambassador M. Humayun Kabir is a seasoned Bangladeshi diplomat with a distinguished career in foreign service, having served as Ambassador to the United States, Nepal, and Australia, as well as in key positions at the Ministry of Foreign Affairs. He retired with the rank of Secretary and currently serves as President of the Bangladesh Enterprise Institute (BEI), where he continues to engage in policy discourse on governance, security, and international relations. As part of its initiative to engage experts on regional crises and their implications for Bangladesh, the Dacca Institute of Research and Analytics (daira) spoke with Ambassador Kabir. Drawing from his deep diplomatic experience, he offered a thoughtful analysis of the Middle East conflict and its cascading effects on Bangladesh’s energy security, labor market, and foreign policy options. This interview was conducted by Afsana Rahman Antora, a researcher at daira.
Through his observation, Ambassador Kabir underscores the urgent need for strategic diversification to shield Bangladesh’s economy from external shocks—particularly in an era of global instability and energy insecurity.
Given the current situation in the Middle East due to the ongoing conflict between Iran and Israel, it appears the war is escalating and persisting over a long period. Since the Middle East is strategically important for Bangladesh, there are three major areas of concern: (1) a significant portion of Bangladeshi migrant workers are employed there, (2) our energy dependence—oil, gas, and electricity—is heavily linked to the region, and (3) our trade routes through the Strait of Hormuz and the Suez Canal are potentially vulnerable. How might this instability affect Bangladesh’s interests in these areas?
We could be affected in multiple ways. First of all, as you mentioned, our readymade garments (RMG) sector is our largest export earner, generating around 40 billion dollars annually. The primary markets for these exports are in Europe and the United States, and most of our goods are shipped via sea routes.
Now, Bangladesh has both direct and indirect dependencies on the Middle East. Directly, we import fuels—oil and gas—from the region. It is geographically convenient, and our refining infrastructure is well-suited to process Middle Eastern crude. So yes, there is significant dependency.
Indirectly, our export shipments to Europe and the U.S. also pass through this region. Any conflict in the Middle East could therefore severely disrupt our trade. For instance, the first immediate impact would be a rise in shipping insurance premiums. If insurance costs go up, so do the overall shipping costs. In addition, supply disruptions become likely. We recently saw the Houthis target vessels in the Red Sea with missiles. That incident slowed maritime traffic significantly. Given that RMG earns us 40 billion dollars annually, such disruptions pose serious risks.
In terms of human resources, a large number of our citizens work across the Gulf—Jordan, Saudi Arabia, UAE, Qatar, Kuwait, and even Iran. Up until last week, the hostilities between Iran and Israel remained confined to those two countries. If this conflict had spilled over into the Gulf region, we would have faced even greater challenges. Luckily, it didn’t.
Even now, the ceasefire between Iran and Israel is extremely fragile. We continue to hear threats exchanged between both sides. Recently, the U.S. President stated that if Iran proceeds with its nuclear program, the U.S. will strike again—implying Israel will follow suit. So the threat of escalation remains. Unless there is a viable and widely accepted resolution to Iran’s nuclear ambitions, the risk will persist. The region remains unstable, and that instability inevitably affects us in one way or another.
What can we do? In terms of energy security, one solution could be diversification. It’s easier said than done, of course—it requires major logistical and financial planning. Right now, we have a long-term LNG import deal with Qatar. Diversifying could mean sourcing from places like Indonesia or countries in this region. I’m not sure what the cost-benefit calculations would look like—whether it would be financially viable, or under what conditions we’d get the gas. Australia is another potential source; we could look toward Southeast Asia and Oceania for diversification.
For oil, some African nations like Angola export petroleum, but I’m unsure of the quality of their crude. Venezuela, though a major oil producer, is geographically distant and under American sanctions, making it an unlikely source for us. So, realistically, we don’t have many immediate alternatives.
That said, as long as instability in the Middle East continues, we need to keep assessing our vulnerabilities and thinking about contingency plans. Where possible, we should conduct comparative analyses and, if financial capacity allows, gradually move toward diversification to reduce our strategic risks.
We’ve discussed fuel security. Now we want to know about the Bangladeshi labor force working in the Middle East. Given the current state of war, they are facing threats to both their lives and their jobs. What can we do to protect them?
That’s a difficult question—thank you for raising it. The Middle East is our largest source of remittances. Although the United States recently topped the list for remittance inflows from a single country, when taken collectively, countries like Saudi Arabia, the UAE, Qatar, Kuwait, and Bahrain contribute the most. The majority of our overseas labor force is deployed in this region.
Out of approximately 13 million Bangladeshis working abroad, around 2 to 2.5 million are in Saudi Arabia alone. In total, about 5 to 6 million Bangladeshis are employed across the Middle East. Where would you relocate such a large workforce if necessary? Diversifying their employment destinations is extremely challenging.
The nature of jobs in the Middle East differs significantly from those in Europe. Yes, we do have workers in Southeast Asia—Malaysia and Singapore, for instance—but transferring millions of workers there is not feasible. Such a shift would also impact our remittance flow negatively. So, in reality, we don’t have much flexibility in this regard.
Therefore, we must prioritize ensuring the safety and security of our workers where they currently are. One possible step could be arranging job-loss insurance or safety-net mechanisms for them. If necessary, we must be prepared to evacuate or relocate workers—similar to what we did in Kuwait in 1991 during the Gulf War. Such contingency plans can be developed in cooperation with friendly nations.
At the same time, raising awareness among workers is crucial so that they’re mentally and logistically prepared for emergency situations. We must keep all of these possibilities in mind and begin working toward them. But as things stand, there is no real alternative to the Middle Eastern labor market—neither in terms of scale nor financial return. There may be alternatives in the future, but not immediately.
Thank you. We know that there is a long-standing rivalry between Iran and Saudi Arabia in the Middle East. How does Bangladesh maintain its neutrality while safeguarding its own interests in that region?
I’d like to make two points here. First, Bangladesh considers both Iran and Saudi Arabia as friends. That said, it’s also true that we have deeper ties with one over the other—and that country is Saudi Arabia.
Saudi Arabia holds religious significance for us as the custodian of the Kaaba, and every year a large number of Bangladeshis travel there to perform the Hajj and Umrah. Additionally, a substantial portion of our migrant workforce is employed in Saudi Arabia, and we also engage in significant oil and gas trade with them.
So, naturally, our relationship with Saudi Arabia is deeper. However, this does not mean that we view Iran as an alternative or as an adversary. We consider our relationship with Iran to be important as well, even if our level of engagement—trade, diplomatic exchange, or labor—is not as extensive.
In essence, we maintain parallel friendships with both countries. The frequency and depth of our interaction may vary, but it’s not a matter of choosing one over the other. We don’t view this as a zero-sum game. Our approach is one of strategic neutrality—prioritizing Bangladesh’s interest while maintaining respectful and cooperative ties with both parties.
We heard that Iran had considered blocking the Strait of Hormuz but later dropped the plan. However, such a possibility may arise again in the future. In that case, how can Bangladesh safeguard its economic activities along this crucial route? What is your assessment?
That’s a very difficult question. If Iran ever closes the Strait of Hormuz, it would likely be a last-resort measure. This is because closing the strait would not only disrupt global oil flows but would also halt Iran’s own exports. Iran would only consider such a drastic move if all other options had been exhausted and the geopolitical situation deteriorated to an extreme degree.
If the Strait of Hormuz were closed, it would stop the oil exports of not just Iran, but also Saudi Arabia, Iraq, and Qatar. In such a scenario, what alternatives would Bangladesh have? Honestly, I don’t see any immediate or viable substitute. You might look toward countries like Indonesia, but even then, replacing such a massive volume of energy supply is nearly impossible in the short term.
However, let me add something from a strategic perspective. Given Bangladesh’s vulnerability in the energy sector, we must begin shifting toward renewable energy sources as a national priority. Even if we can transition just 30% of our energy consumption to renewables, that would significantly reduce our dependency on imported oil and gas. Fortunately, the government is already considering this shift.
There’s also optimism around domestic gas exploration. Our onshore gas reserves still hold potential, though we’ve lagged behind in offshore exploration. We need to pursue aggressive exploration and development of our onshore gas fields. If we could domestically meet even 60% of our fuel needs, that would be a game-changer for our energy security.
Additionally, we can consider regional energy cooperation. For example, we currently import 40 megawatts of electricity from Nepal. This can be scaled up—100, 200, even 1,000 megawatts. Expanding regional electricity imports, particularly from Nepal and India, could serve as a practical alternative for powering large-scale industrial operations.
In summary, while we cannot fully eliminate our dependence on routes like the Strait of Hormuz in the short term, we can reduce our exposure through a combination of renewable energy investment, domestic gas exploration, and regional electricity cooperation. These steps may not provide immediate protection, but they are crucial for building long-term resilience.
We had assumed that global oil prices would rise sharply due to the conflict in the Middle East. Fortunately, that hasn’t happened yet. However, as you mentioned, the war isn’t over—there are still threats from the United States, and tensions remain high. How severely could this situation impact Bangladesh’s economy?
It could have a massive impact. Energy is the backbone of any economy. We’ve already seen signs of crisis in our industrial sector over the past few weeks—factories are facing disruptions and uncertainty. If the situation worsens, there is a strong possibility of rising inflation, which is already quite high in Bangladesh.
Our economy is currently in a fragile state. If there’s a disruption in oil and gas supply, it will drive inflation even higher. That would be very dangerous. It will affect production, dampen investment, and hinder both exports and imports. A country like Bangladesh could end up facing a multi-dimensional crisis—economic, industrial, and social.
You’ve already touched upon diversification earlier, but I’d like to revisit the issue more specifically. In light of the fuel supply crisis stemming from the Middle East conflict, how can Bangladesh diversify its fuel sources and move toward greater energy security?
There are three primary areas where Bangladesh can focus to diversify its energy sources:
- Renewable Energy:
Currently, only about 2–4% of our energy comes from renewable sources. But I believe that with focused effort, we can scale this up to 20–30%. It’s not an unachievable target if we take it seriously. The government has already signaled an interest in expanding renewables, and this could enable us to reach partial self-sufficiency in energy within a relatively short time. - Domestic Gas Exploration (Onshore):
Although offshore gas exploration has received some attention in recent years, we haven’t made much headway. Onshore, however, we already have a number of gas fields, and experts believe that more remain undiscovered. It’s worth noting that we haven’t undertaken serious onshore exploration for a long time. If we launch an aggressive campaign in this area, we could unlock new domestic gas reserves, providing a valuable buffer. - Regional Electricity Imports:
We’re currently importing about 40 megawatts of electricity from Nepal and between 1,000 to 1,500 megawatts from India. There’s significant potential to increase imports from Nepal, especially since their energy system is hydro-based and renewable. We could potentially scale this up to 400, 1,000, or even more megawatts.
If we seriously pursue these three tracks—renewables, onshore gas, and regional cooperation—we can create a meaningful alternative to our current dependency on Middle Eastern oil and gas. Our essential base load electricity could then be sustained through imported sources, reducing the pressure on oil and gas supplies. That way, even if a prolonged crisis persists in the Middle East, Bangladesh would have a safety net in place.
Thank you. If Bangladesh enters into more long-term fuel supply deals with Gulf countries, do you think this will ensure our fuel security—or, given the ongoing war crisis, could it increase our vulnerability?
If the region remains peaceful, then long-term fuel agreements with Gulf countries can indeed be beneficial for Bangladesh. Stability allows us to secure steady supplies at negotiated rates, which helps with long-term planning and budgeting.
However, in the current climate of uncertainty in the Middle East, executing such long-term agreements becomes tricky. In the event of an insurgency or regional escalation, how would those deals hold up? Most long-term contracts include clauses that allow withdrawal or suspension in the case of emergencies or natural disasters.
So, while these deals are beneficial in normal circumstances, in today’s volatile situation, we must approach them with more caution and a diversified mindset. It’s time to think beyond traditional approaches and prepare for contingencies.
According to reports from The Guardian and other sources, Iran has provided drones to Myanmar, and there are indications it may provide further weapons support. In light of Bangladesh’s national security and the unresolved Rohingya crisis, how should Bangladesh manage its diplomatic relations with Iran? Can Bangladesh still secure its interests in this context?
Thank you. If Iran has provided drones to Myanmar, that’s ultimately a matter between those two states. From Iran’s perspective, this is probably a response to a specific strategic or defense need—especially given Myanmar’s internal conflicts.
As for the Rohingya issue, I believe the root problem lies in Myanmar’s dysfunctional political system. The crisis is a direct outcome of decades of exclusionary governance, lack of democracy, and systematic repression. Unless and until Myanmar undertakes meaningful political reform and returns to inclusive, democratic governance, a sustainable solution to the Rohingya crisis will remain elusive.
Even if we maintain diplomatic pressure and engage in advocacy, repatriation will not happen unless the conditions on the ground in Myanmar become favorable. The agreement we signed with UNHCR contains a critical clause: voluntary return. This means Rohingyas cannot be forced to go back—they must be willing, and the environment must be safe, secure, and dignified.
So, unless Myanmar transforms itself politically and creates such an environment, the crisis will persist regardless of what diplomatic channels we pursue. Bangladesh must keep pushing diplomatically but also acknowledge that the solution is fundamentally tied to Myanmar’s internal reform.
What is your view on Bangladesh’s position of solidarity with the humanitarian cause in Gaza and Palestine? Do you think it is possible for Bangladesh to shape a relevant and strategic diplomatic policy in the Middle East while maintaining this position?
Our stance is, first and foremost, rooted in humanitarian and ethical concerns. We support the Palestinian cause on moral grounds and recognize Palestine as a state. Bangladesh maintains diplomatic ties with the Palestinian Authority and raises its voice in solidarity whenever possible.
However, beyond that, our options are very limited due to the complex political realities of the Middle East. The kind of policies pursued by Israel, and the broader geopolitical alignment in the region—especially the dominance of U.S. interests—leave us with little material influence.
For example, when the United States carries out military actions against Iran, we have no real say or leverage in that matter. In global affairs, Bangladesh lacks the hard power to shape outcomes. So, while we will and must continue to speak out based on ethics, justice, and international law, our actual contribution remains largely diplomatic and symbolic. That said, this form of solidarity still holds moral weight and is important for our global posture.
This is our final question. Given the current Middle Eastern context, what kind of proactive diplomatic strategy can Bangladesh adopt to protect its interests—particularly in securing petroleum supply and safeguarding labor markets?
To be honest, many of these developments are beyond our control. However, what we can do is be proactive in certain strategic areas.
First, we need to rethink our fuel policy. This includes exploring how to secure energy from domestic sources and our immediate neighborhood. We should assess the potential for new labor markets in other parts of the world and explore opportunities for diversifying both our oil and gas supply.
Yes, we could consider importing coal from Australia as an alternative, but coal is a “dirty” energy source. As a country that is highly vulnerable to climate change, and as one committed to global climate goals, relying on coal contradicts our long-term environmental objectives. Still, if the energy crisis becomes too severe, we may need to evaluate all options—including less deable ones—based on necessity rather than idealism.
Second, we must act within our capacity—pursuing whatever is realistically achievable given our economic and diplomatic limitations.
Finally, on the diplomatic front, Bangladesh is a signatory to the Nuclear Non-Proliferation Treaty (NPT), which is becoming increasingly relevant in Middle Eastern geopolitics, especially concerning Iran’s nuclear program. This gives us a small but meaningful space to contribute to the global dialogue. We can engage with friendly countries and urge our allies to play a more active role in promoting peace and stability in the region.