Just hours after Israel’s airstrikes on Iran, the global economy began to feel the bite of the attack. Markets reacted swiftly, with Asia-Pacific and US stocks facing selloffs, while the Brent global benchmark for oil prices surged more than 10% to $75.15 per barrel. Airspace in the Middle East has also been shut down, leading to reroutes and flight cancellations. Bangladesh too is likely to be affected by the conflict. The conflict puts our remittance earnings at risk as the Middle East is a major market for Bangladesh’s labourers. And though trade volume is low between Bangladesh and Iran, it has long-term strategic value. Furthermore, oil prices could affect trade logistics. Here is what experts have to say about it.
Sketches: TBS
Impact on international travel, logistics looming due to airspace closures
Major General (retd) ANM Muniruzzaman
President, Bangladesh Institute of Peace and Security Studies (BIPSS)
Sketch: TBS
What we are witnessing is a dangerous escalation that is pushing the already volatile Middle East into further instability. The recent developments carry a serious risk of the conflict spreading beyond its current scope.
There is genuine concern that what has begun as a regional military action may spiral into a wider confrontation, drawing in other state and non-state actors. This could have far-reaching consequences not only for the region but also for the global community.
Already, we are seeing immediate repercussions. One of the first sectors to be affected is aviation. Airlines are being forced to reroute flights to avoid conflict zones, resulting in longer travel times, increased fuel consumption, and rising ticket prices. These disruptions are not temporary; if the situation continues to deteriorate, we may see broader consequences for international travel and logistics.
More critically, the global supply chain — already under strain in recent years — is facing renewed disruption. Key maritime and land trade routes through the Middle East may become unsafe or unviable. Rerouting shipments through longer and more complex paths will lead to delays, higher transportation costs, and logistical bottlenecks. This will inevitably result in increased prices for goods and commodities, affecting both producers and consumers worldwide.
The energy market is particularly vulnerable. The Middle East remains a crucial hub for global oil and gas supplies. Any instability in the region tends to send shockwaves through global energy markets. We have already observed price volatility in recent days, and this trend is likely to continue and possibly worsen, depending on how the conflict unfolds. Price fluctuations will not only affect the cost of fuel but also have secondary effects on transportation, manufacturing, and household energy expenses.
Another area of concern is the labour market. Bangladesh and many other countries are significantly dependent on remittances from migrant workers employed in the Middle East. If instability spreads and affects the economies of neighbouring states, it could lead to a decline in labour demand, wage cuts, or even job losses. Such a scenario would have a direct impact on the income of thousands of families and the overall economic health of labour-sending countries like ours.
In essence, the fallout from this conflict has the potential to touch multiple sectors — communications, trade, energy, labour, and national security. The longer the instability persists, the more pronounced these effects will become. Furthermore, the possibility of the conflict escalating into a broader regional war is now significantly higher. This is a deeply concerning development that demands close monitoring and proactive engagement from the international community to prevent further deterioration.
TBS’ Anonno Afroz spoke to Major General (retd) ANM Muniruzzaman over the phone.
If Iran shuts down oil facilities, rising oil prices could affect maritime economy
Humayun Kabir
Former ambassador of Bangladesh to US
Sketch: TBS
The act of aggression by Israel was not entirely unexpected — there were signs that something like this might happen. There has been much discussion about Iran’s uranium enrichment programme. The primary complexity of the discussion was that, while the US maintained Iran would not be able to continue enrichment, Iran stated it was for peaceful, natural purposes.
It seemed like a zero-sum game, which is why, until the day before yesterday, progress appeared impossible. Amidst this, talks were scheduled to resume tomorrow, Sunday.
The US, as a sovereign state, has been trying to manage its relationship with Israel. In fact, Netanyahu has been saying for the past 10 years that Iran is trying to build nuclear weapons. And when the 2015 JCPOA (Iran Nuclear Deal) was signed, Israel opposed it from the beginning.
In 2018, President Trump was motivated to withdraw the US from the deal. However, recently, President Trump, I believe, was trying to reach a compromise. My assumption is that he might have done so based on discussions with the Israeli Prime Minister.
This diplomatic effort, if unsuccessful, could lead to Israel attacking Iran. That was the subject of discussion. But last night, Israel attacked Iranian nuclear facilities, military establishments, and scientists.
To me, it seems like a widespread attack designed to completely destroy Iran’s capabilities. A similar event occurred in 1981, when Israel destroyed Iraq’s nuclear project, known as Osirak. I believe they have now started a similar method of attack on Iran. They are saying the operation will continue — meaning it is not a one-time strike but an ongoing campaign.
It is difficult to say how much damage Iran has sustained, but it appears to be a significant blow. Several of their scientists working on the nuclear project have been targeted, and their Army Chief and RBC Chief have reportedly been hit. This can be described as a decapitation move or strike.
If Iran retaliates, it will likely have to be a major response — because even if there is public opinion against the Iranian government, Iran as a nation has now been challenged. The government might be forced by public pressure to take countermeasures. It remains to be seen how capable they are — it depends on many factors.
The US State Secretary had previously said that action was underway and that the US was not involved in this. He also urged Iran not to attack US facilities. To me, this suggests a tendency for the US to distance itself from Israel.
I am sure President Trump will be annoyed, because while discussions were ongoing — and President Trump himself was commenting on them — Israel’s action has disrupted US diplomatic efforts. At this point, there may be no reason to continue those talks. This feels like a blow or disregard to the United States, or even an act of defiance towards President Trump.
The intensity of Iran’s possible counter-attack, I believe, will depend on the US’s role in relation to Prime Minister Netanyahu. And if Iran attacks, I think Israel might retaliate further, which could lead to fears of a large-scale war.
It is clear that Netanyahu wants to establish Israeli control — a goal the US tried to achieve before but did not succeed. It remains to be seen whether Israel can succeed now. However, I think Netanyahu might have taken this initiative beyond his capabilities, and a negative consequence or outcome might await him.
I must say that this is certainly a deplorable act. You cannot attack another country based on your own interpretation of national security. In that regard, I consider it reprehensible. However, I believe the international community should take the initiative to ensure this does not escalate into a major war.
Could this have an impact on our labour market, given that we have a large number of human resources in the region? Jordan has already closed its airspace. I believe that if Iran retaliates, many Middle Eastern countries might do the same. If the conflict escalates, it could have a negative impact on much of the region.
If Iran closes its oil facilities, oil prices could rise, creating various anxieties. This affects not only the Bangladeshi population but also the economy of the maritime region, the global economy, and the immeasurable human and material cost of a full-scale war.
This is, indeed, a very difficult situation. To my knowledge, in the past 20 years, the world has not faced such a situation, such a great apprehension. I feel this is a very, very difficult and challenging time.
TBS’ Nasif Tanjim spoke to Humayun Kabir over the phone.
Possible sanctions, blockades puts Bangladesh’s strategic commercial ties with Iran at risk
Altaf Parvez
Researcher of South and Southeast Asian history and politics
Sketch: TBS
This will have a direct impact on Bangladesh — there’s no doubt about that. Iran is home to a considerable number of Bangladeshis. Some are there for work, others for education. Their lives and livelihoods are now under threat, and any further instability will only worsen the situation for them.
It is not just about individuals either. Bangladesh maintains commercial ties with Iran, particularly in sectors such as fertilisers, oil-related products, and other raw materials. Even if the trade volume is not huge, these relations have long-term strategic value. I fear that such ties could now face disruptions due to increasing tensions and the possibility of sanctions or blockades.
But what concerns me more is the bigger picture. We are witnessing a seismic shift across the Middle East. There’s a new power equation in the making. A kind of polarisation is happening — both politically and militarily — that could reshape the entire region. That has implications not only for regional players but for countries like Bangladesh that have always maintained diplomatic balance in the area.
Historically, Bangladesh has stood in solidarity with progressive and anti-imperialist forces in the Middle East, particularly on the issue of Palestine. Countries like Syria, Iraq and Yemen — despite their current state — were among the first to recognise Bangladesh after our Liberation War.
That legacy matters. But now those very states are either weakened or have collapsed into failed states. If Iran becomes similarly cornered or isolated, we risk losing another pillar of that historic solidarity.
Bangladesh has had a long and layered relationship with Iran, politically, culturally, and economically. I fear that the relationship might now come under strain. In the long run, this could limit our diplomatic space and even our role in broader global forums where we have traditionally taken moral positions on global conflicts, particularly in the Muslim world.
TBS’ Anonno Afroz spoke to Altaf Parvez over the phone.
If the Middle East burns, Bangladesh’s economic recovery may never begin
Mehdi Mahbub
President, RMG Centre
Sketch: TBS
First of all, this is an issue that directly affects us — our connection with the Middle East. The region is important for our workers’ remittances and as a key destination overall. If the situation escalates, and things worsen, it could have a serious impact on us. The volatility of the Middle East would bring extremely negative consequences for Bangladesh.
The real impact on Bangladesh will come economically, because if the global economy enters a downtrend — which is very likely if the conflict intensifies — it will hit us hard. Our investments are already headed in a negative direction. Yes, things looked slightly better around Eid, but how long will that continue? That’s uncertain.
Our exports are not diversifying. And if another war breaks out, there will be a serious impact — first on our economy, and second on global purchasing power. Think about it: Our largest consumer markets are Europe and the United States. If they get involved in any way — and it’s looking increasingly likely — their purchasing power will decline.
One of today’s headlines was about the rising price of oil — you’ve seen it. This has a direct implication for the economy, not just ours but also for the European and American economies. So, we are heading toward a serious economic shock.
Secondly, and this is something I fear more deeply, is the political uncertainty we are facing in Bangladesh. We are entering an uncertain period with national elections ahead. We are hoping that a new government, following the elections, will bring in fresh investment.
But if this crisis continues to grow, that hope will also be shaken. So, this is a massive blow to Bangladesh — both from the Middle East crisis and from the impact it will have on our workers and their remittances.
This is not just a political analysis — this is my view as a business analyst. Iran is a major oil exporter. Now, if Iranian oil stops reaching the market, that too will have a knock-on effect.
As I said, oil prices have already started to rise. And pay close attention to the Strait of Hormuz — there is no need to be an astrologer to predict what’s coming. Over 20% of the world’s oil flows through the Strait of Hormuz. So this has a very direct impact.
Then, consider Yemen’s Houthis, Iran’s closest regional allies. They are already taking action. If both of these fronts escalate simultaneously, oil prices will continue to rise. A further escalation will have major global implications, and naturally, Bangladesh will also be affected.
Airspace is another concern. We have already seen some closures. If the crisis escalates further, more airspace might be shut down. That will directly affect global aviation. For businesses, this will be a massive blow.
Take what happened between India and Pakistan — when airspace was shut down, both sides were affected, but India suffered more economically. Unfortunately, the current location of the unfolding crisis — right after Jordan — is highly sensitive.
God forbid, if this spreads to the Gulf, the situation will worsen significantly. Iran has already issued indirect threats, and they’re maintaining that posture. The language they’re using is telling: they’re talking about “US interests in the Middle East.” What does that mean? You know it well, the US has military bases in Saudi Arabia and several other countries in the region.
If things deteriorate further, the airspace will inevitably be affected. Other countries may start shutting theirs down too. Now, in the context of Bangladesh, our major connections to Europe and the US are via the Middle East — through airlines like Emirates, Qatar Airways, and Turkish Airlines. These are our key transit routes. If airspace is restricted or closed, ticket prices will rise even further — they are already quite high — and could spike even more.
Lastly, unfortunately, the political scene in South Asia is currently extremely constrained. People-to-people connectivity is limited for multiple reasons, including religious and geopolitical ones.
Just look at India’s strong ties with Israel. Pakistan may not be directly linked with Iran, but it has a strong connection with Turkey. And most countries in South Asia, including Bangladesh, are Muslim-majority nations. So, if this escalation intensifies, there is a real fear that new forms of political groupings will re-emerge even in South Asia. That is another very real apprehension.
TBS’ Nasif Tanjim spoke to Mehdi Mahbub over the phone.
