Geopolitically driven oil supply disruptions could create severe headwinds for oil-importing economies through higher inflation, tighter financial conditions, and pressure on trade balances, according to a recent World Bank (WB) report.

The report comes at a time when the oil market has been volatile due to supply disruptions from Gulf nations, key oil-producing countries, amid the Middle East conflict.

Oil prices rose by more than 3 percent yesterday as stark differences between the US and Iran on a proposal to end the war in the Middle East pushed supply concerns back into the spotlight, Reuters reported.

Brent crude futures gained $3.47, or 3.3 percent, to $107.68 a barrel at 1045 GMT, according to Reuters.

The Asian Development Bank (ADB) last week said the pre-war average oil price was $69 per barrel during the January-February period of this year.

Bangladesh meets almost all its petroleum requirements through imports.

The spike in oil prices has increased its energy expenditures by an estimated $3 billion, finance minister said recently The WB report on the effects of geopolitical oil supply shocks, published on April 28, said heightened geopolitical tensions can lead to actual, previously unexpected physical disruptions in oil supply.

The report cited Iraq’s invasion of Kuwait in August 1990 as an example, which caused about a 6 percent decline in oil output and led to a roughly 33 percent surge in oil prices within a month.

The conflict in the Gulf region of the Middle East, which started in March 2026, is another such instance, and may amount to the largest supply shock on record, with estimates by the International Energy Agency (IEA) suggesting a reduction of close to 9 percent in global oil supply by early April 2026, it said.

Correspondingly, the average Brent oil price climbed 46 percent in March 2026 compared with February, it said, adding that anticipation of possible supply disruptions may also trigger price hikes.

Bangladesh meets almost all its petroleum requirements through imports.

The spike in oil prices has increased energy-related expenditures by an estimated $3 billion, Finance Minister Amir....