Due to disruptions in crude oil imports caused by the Iran war, the country’s only state-owned oil refinery, Eastern Refinery PLC, has been forced to slow down production. Relevant sources say that the refinery’s existing crude oil reserves are nearly exhausted. Under the current situation, production could come to a complete halt within a week.
The refinery, located in Patenga, Chattogram, had been primarily refining “Arabian Light Crude” from Saudi Arabia and “Murban Crude” from the United Arab Emirates, supplying diesel, petrol, octane, and other fuels across the country. Last month, two shipments of oil were scheduled to arrive from these countries. However, due to the war, both vessels were delayed, increasing pressure on production.
Eastern Refinery is a subsidiary of the Bangladesh Petroleum Corporation (BPC). Speaking about the production situation yesterday evening, BPC Chairman Md. Rezanur Rahman told Prothom Alo, “Production is being disrupted due to the lack of oil supply. However, it has not yet been completely halted. It may have to be fully stopped within a few days.”
He added that an initiative has been taken to import 100,000 tons of crude oil from Malaysia. However, the concerned supplier has not yet submitted the required performance guarantee (PG), creating uncertainty over whether a new shipment will arrive this month. There is, however, a possibility that a vessel may reach the country at the beginning of next month.
According to BPC and refinery sources, the refinery has a crude oil storage capacity of about 225,000 tonnes. Before the war began, the stock stood at around 150,000 tonnes. However, as of 1 April, usable reserves had dropped to just 19,000 tonnes. In addition, there were about 33,000 tonnes of oil that are not usable under normal conditions. This portion is considered “dead stock.”
Amid the crisis, around 5,000 tonnes of crude oil stored in the tanks of the Single Point Mooring (SPM) project were recently brought into the refinery, but this supply has also been exhausted.
Two responsible officials from BPC and the refinery told Prothom Alo that the refinery has five production units: the crude oil distillation unit, asphaltic bitumen plant, visbreaker unit, catalytic reforming unit, and condensate fractionation plant. The initial stage of crude oil processing takes place in the crude oil distillation unit, while the main production activities are carried out in the others.
When contacted, BPC General Manager Muhammad Morshed Hossain told Prothom Alo this Tuesday afternoon that production at the refinery has not stopped. Currently, it is producing an average of 120 tonnes of petrol and about 100 tonnes of octane per day. Diesel and bitumen are also being produced. This level of production can continue for about seven more days, although the pace has been reduced. Production will remain slow until new shipments arrive. He added that small amounts of oil are also being extracted from the dead stock at the bottom of the tanks. Altogether, about 25,000 tons of crude oil are still usable.
Efforts to bring in oil shipments
On 2 March, a vessel went to load oil at Ras Tanura port in Saudi Arabia but became stranded due to the war. The ship, named Nordic Pollux, was loaded with crude oil on 3 March. Although it initially set sail, it returned to the Ras Tanura terminal due to unfavorable conditions and remains stuck there.
Meanwhile, Bangladesh had planned to import 100,000 tonnes of oil last month from the Abu Dhabi National Oil Company (ADNOC) in the UAE. For this, Bangladesh Shipping Corporation had signed a deal with a vessel named MT Omera Galaxy. However, the shipping company later canceled the contract. ADNOC has proposed loading oil from Fujairah port instead of Jebel Dhanna, which would avoid the Strait of Hormuz but increase import costs.
Bangladesh’s fuel supply now depends largely on imported refined products. Therefore, even if Eastern Refinery’s production is temporarily halted, the risk of an immediate major shortage of fuels like diesel or furnace oil is relatively low
According to the pre-set schedule, another 100,000-tonne shipment was supposed to arrive in April from Ras Tanura. As an alternative, arrangements are being made to source oil from Yanbu port in Saudi Arabia. However, officials say this would increase costs by $0.25 per barrel.
BPC officials said efforts are ongoing to bring in the stranded vessel through alternative routes. Even though a ceasefire has been declared, the situation has not yet normalised, making it uncertain when oil shipments can resume.
Following a joint attack by the United States and Israel on Iran on February 28, conflict spread across the Middle East. Shipping through the Strait of Hormuz, one of the main routes for global energy transport, was effectively halted, putting Bangladesh’s imports at risk. Although a ceasefire was reached on 8 April, vessel movement through the Strait has not yet returned to normal.
Impact of a production shutdown
To understand the potential impact of a shutdown, it is important to look at the import structure. In the 2024–25 fiscal year, BPC spent Tk 50,195 crore to import 6.215 million tonnes of fuel. Of this, 1.51 million tonnes (about 24 per cent) was crude oil, while the remaining 76 per cent consisted of refined fuel, which is directly usable.
In this context, Bangladesh’s fuel supply now depends largely on imported refined products. Therefore, even if Eastern Refinery’s production is temporarily halted, the risk of an immediate major shortage of fuels like diesel or furnace oil is relatively low.
However, refinery sources note that refining 100,000 tonnes of crude oil can produce around 40,000 tonnes of diesel, 15,000–20,000 tonnes of petrol and octane, and about 30,000 tonnes of furnace oil. As a result, a significant portion of petrol and octane still depends on domestic refining. If production remains suspended for an extended period, it could create pressure on transportation and consumers.