Houthi control of Bab el-Mandeb: What it means for Bangladesh’s trade

A tanker named MT Ninemia carrying fuel oil for Bangladesh Petroleum Corporation (BPC) set sail from Saudi Arabia’s Yanbu port on 23 July. The tanker could have reached Bangladesh more quickly and by a shorter route through the Bab el-Mandeb Strait. Yemen, an Asian country, lies on one side of the strait, while Djibouti, an African country, lies on the other.

To avoid the risk of attack, the Bangladesh-bound Ninemia bypassed the Bab el-Mandeb and reached Chattogram after travelling through the Suez Canal, the Mediterranean and around Africa. The vessel arrived at Chattogram port on Saturday. The journey took around 50 days. Had it travelled through the Bab el-Mandeb, it would have taken about 16 days. The cost would also have been much lower.

PK Roy, manager (operations) of Prime Ocean Trade Ltd, the tanker’s local representative, told Prothom Alo that taking a longer route can add up to USD 4 million to the cost of a tanker’s voyage. Such an additional cost does not arise when ships take the direct route.

The Strait of Hormuz is one of the main routes for supplying fuel from the Middle East to Bangladesh and other Asian countries. Shipping through the route has been disrupted by the Iran war. The Bab el-Mandeb Strait in the Red Sea had emerged as an important alternative route for bringing fuel oil to Bangladesh from Saudi Arabia. Now, risks have increased along that route as well.

Iran-backed Houthis have seized Yemen’s Mokha port and the strategically important Perim, or Mayyun, island in the Bab el-Mandeb. The island divides the strait into two and is located near its narrowest point. As a result, the Houthis’ strategic control over this important international shipping route has increased significantly.

The Houthis, however, have not yet halted all international shipping. They claim that commercial vessels from countries other than Saudi Arabia are safe to operate. However, the renewed spread of the war has raised security concerns among shipowners and traders.

For Bangladesh, the risks are not limited to fuel imports. A large share of the country’s exports to Europe and parts of the United States passes through the Bab el-Mandeb, the Red Sea and the Suez Canal. This shipping route is also important for Bangladesh’s trade with several African countries, including Egypt and Morocco, as well as with countries in the Mediterranean and Black Sea regions.

According to National Board of Revenue (NBR) data, Bangladesh exported goods worth USD 35.51 billion (3,551 crore) to Saudi Arabia, Egypt, Morocco, Europe and the United States in the 2025–26 fiscal year. It imported goods worth USD 10.93 billion (1,093 crore) from these countries and regions. Overall, the volume of trade amounted to USD 46.45 billion (4,645 crore).

Bangladesh’s total foreign trade (imports and exports) stood at USD 119.39 billion (11,939 crore) in the 2025–26 fiscal year. Trade with countries and regions dependent on the Bab el-Mandeb and Suez Canal accounted for around 39 per cent of the country’s total foreign trade.

More importantly, Bangladesh’s exports are heavily dependent on this route. According to NBR data, around 77 per cent of the country’s total exports went to these markets. By contrast, around 15 per cent of total imports came from these regions.

However, trade as a whole is not being disrupted yet. If Houthi control becomes tighter or shipping companies begin avoiding the Bab el-Mandeb because of security risks, alternative routes will have to be used. These take longer and cost more.

The immediate concern for Bangladesh is fuel imports. After shipping through the Strait of Hormuz was disrupted, Saudi Arabia increased its use of the Red Sea port of Yanbu to supply oil to Asian countries. But with the Houthis maintaining their ban on Saudi vessels, the risks along this route have increased.

Fuel oil, liquefied natural gas (LNG), liquefied petroleum gas (LPG), fertiliser and various other goods reach Bangladesh through the Strait of Hormuz and the Bab el-Mandeb. At present, virtually no vessels are arriving in Bangladesh through Hormuz. They are still coming through the Bab el-Mandeb.

If the situation there deteriorates, it will create security risks, higher insurance costs, increased shipping charges, longer transit times and uncertainty in the supply chain. Analysts say that if the crisis is prolonged, it could affect many sectors of Bangladesh’s economy, from fuel imports to readymade garment exports.

The situation is somewhat different for Bangladesh’s exports. If cargo ships bound for Europe, the Mediterranean and parts of the United States avoid the Bab el-Mandeb and Suez Canal, they will have to sail around the Cape of Good Hope. According to shipping agents, this can generally add another 10 to 12 days to the journey. Fuel consumption and transportation costs will increase as well.

The cost of sea freight for exported goods is usually borne by foreign buyers. However, there may be attempts to pass on the sudden increase in costs to exporters.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told Prothom Alo, “The indirect impact will be greater on exports. Even if foreign buyers pay the additional freight costs, ultimately the pressure may fall on us.”

Mahmud Hasan Khan said imports of raw materials for the garment industry from Turkey and cotton from various parts of Africa could be affected immediately. If it takes longer for raw materials to arrive, production and export schedules will also come under pressure.

The impact of the US and Israeli attacks on Iran, which began in February, has affected Bangladesh in various ways. The country faced a severe fuel oil shortage in March and April. Now, Bangladesh is not getting enough gas. Power plants cannot be operated properly. Load-shedding is continuing for several hours a day across the country.

The prices of fuel oil and gas have risen sharply. This has put pressure on the country’s foreign exchange reserves, while prices have also had to be increased domestically.

Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue (CPD), told Prothom Alo that if the Bab el-Mandeb crisis continues for a prolonged period, Bangladesh’s export competitiveness will decline. The country will particularly fall behind competitors that do not depend on the strait, as both the time and cost of transporting goods will increase.

Mustafizur Rahman also said fuel oil imports would come under additional pressure, particularly when global energy prices are rising. The government must take strong initiatives now to increase imports from alternative sources of fuel. In the medium term, greater emphasis should be placed on expanding the use of solar power.