DHAKA, BANGLADESH – A war initiated by the United States and Israel is imposing a severe economic cost on the developing world, with countries like Bangladesh forced into drastic austerity measures as global energy markets spiral into chaos. The Bangladeshi government has shut all universities and implemented fuel rationing in response to soaring prices and supply disruptions directly linked to the conflict, a stark illustration of how the Global South is paying the price for a war it did not start.
The crisis stems from the effective closure of the Strait of Hormuz, a critical artery for global trade through which approximately 20 percent of the world's oil supplies transit. Following the US-Israeli assault on Iran that began on February 28, Iranian officials have vowed to keep the strait closed, sending shockwaves through energy markets. Brent crude oil, the international benchmark, surged to nearly $120 a barrel, a level not seen since 2022, before settling into a volatile pattern. The volatility has been exacerbated by conflicting messages from US President Donald Trump's administration regarding the war's duration and potential US naval intervention in the strait.
For import-dependent nations like Bangladesh, which sources 95 percent of its energy from abroad, the consequences are immediate and severe. The government has redirected natural gas from fertilizer factories to power plants to prevent widespread outages, a move that threatens future agricultural output. Similar pain is being felt across the region, prompting fears of wider instability. In Pakistan, already squeezed by IMF-mandated austerity, the rising fuel costs are expected to deepen an existing cost-of-living crisis, placing immense pressure on household budgets.
The ripple effects are spreading globally. Airlines including Australia’s Qantas and Scandinavia’s SAS have hiked ticket prices, citing the dramatic spike in jet fuel costs. This disrupts not only travel but also vital supply chains that rely on air freight. The turmoil has forced major Gulf producers like Saudi Arabia, the UAE, and Kuwait to cut oil production as storage tanks fill due to the inability to export.
In response, Western nations are discussing countermeasures that underscore the power imbalance in the global economic system. The International Energy Agency is reportedly considering the largest-ever release of strategic oil reserves, while French President Emmanuel Macron has spoken of a "defensive" mission to escort vessels through Hormuz. US Treasury Secretary Scott Bessent also floated the idea of an "international coalition" for tanker escorts. These proposals, however, are reactions to a crisis precipitated by Western military action, offering a temporary fix to a problem of their own making while nations like Bangladesh and Pakistan bear the immediate, tangible consequences.
Mohsin Rana
