Iran War Exposes Cost of Asia’s Fossil Fuel Reliance
The ongoing conflict involving Iran has triggered a second major energy shock in four years, highlighting the severe economic risks for Asian emerging markets dependent on fossil fuel imports. Following US and Israeli airstrikes on February 28, Iran blocked the Strait of Hormuz, disrupting long-term LNG supplies. Bangladesh, which had relied on such contracts, was forced to purchase emergency cargoes from the volatile spot market at double pre-war prices, costing approximately $880 million. This expenditure equals nearly 15% of its average monthly imports, forcing the government to seek external financing and cut public spending. In stark contrast, Pakistan avoided spot purchases due to a consumer-led solar revolution that reduced its fossil fuel dependence from 32% to 25%. Data indicates Pakistan slashed $12 billion in oil and gas imports over four years through renewable expansion. Analysts argue that Bangladesh’s predicament underscores the urgent need for a global shift to clean power to mitigate price shocks and inflation, a trend already reducing global fossil-fuel power output despite supply disruptions.
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Iran War Exposes Cost of Asia’s Fossil Fuel Reliance
The ongoing conflict involving Iran has triggered a second major energy shock in four years, highlighting the severe economic risks for Asian emerging markets dependent on fossil fuel imports. Following US and Israeli airstrikes on February 28, Iran blocked the Strait of Hormuz, disrupting long-term LNG supplies. Bangladesh, which had relied on such contracts, was forced to purchase emergency cargoes from the volatile spot market at double pre-war prices, costing approximately $880 million. This expenditure equals nearly 15% of its average monthly imports, forcing the government to seek external financing and cut public spending. In stark contrast, Pakistan avoided spot purchases due to a consumer-led solar revolution that reduced its fossil fuel dependence from 32% to 25%. Data indicates Pakistan slashed $12 billion in oil and gas imports over four years through renewable expansion. Analysts argue that Bangladesh’s predicament underscores the urgent need for a global shift to clean power to mitigate price shocks and inflation, a trend already reducing global fossil-fuel power output despite supply disruptions.
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