Oil, Gold Prices Jump as Conflict Threatens Trade Routes

The escalating conflict between Israel and Iran is driving up global oil and gold prices, creating uncertainty for trade, production, and business around the world — including in Bangladesh.

Business leaders and economists warn that if the war drags on, it could disrupt exports, raise shipping costs, and lower the demand for Bangladeshi workers in the Middle East.

“Any war affects the global economy. Transport and oil costs go up, which hurts business. Export-import lead times also increase, raising operational expenses,” said Mahmud Hasan Khan Babu, newly elected president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Babu, who is also the managing director of Rising Group, said that disruptions to major maritime trade routes would increase the cost of doing business and negatively affect Bangladesh’s key export sector — readymade garments.

Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, echoed these concerns. “This war could break global supply chains and push oil prices higher, leading to more inflation,” he said.

Dr Masrur Reaz, chairman of Policy Exchange Bangladesh, highlighted risks to the Strait of Hormuz, a key route for around 25% of the world’s oil. He warned that any escalation affecting the strait could drive global oil prices sharply higher. He also mentioned the vulnerability of the Suez Canal, pointing to past disruptions by Houthi groups in the Red Sea.

“If similar incidents occur again, shipping costs and lead times will rise sharply,” said Dr Reaz, adding that labour demand for Bangladeshi migrants in the Gulf region may also decline.

Mohiuddin Rubel, managing director of Bangladesh Apparel Exchange Ltd, said global business stability is already under pressure. “With rising oil and freight costs, production and transportation are being disrupted,” he said.

Rubel warned that any blockage in routes like the Strait of Hormuz could send Brent crude prices soaring to $120–$130 per barrel. If the Suez Canal is blocked, vessels may have to reroute around the Cape of Good Hope, adding up to 15 extra days and increasing shipping costs by 30% to 40%.

“These costs will hurt exporters and could lead to delays or order cancellations if buyers respond to inflation by cutting back,” Rubel said. He urged global leaders to work swiftly toward de-escalation.

However, he cautioned against premature decisions, noting, “The situation must be monitored closely. Reacting to just a few days of conflict may be too early.”