Only a "negotiated solution" can end the conflict between the US and Iran, Tehran's foreign minister has said, after President Donald Trump publicly rejected a proposal to reopen the Strait of Hormuz.
What was proposed and refused
Trump told reporters at the White House that Iran's proposal was not "acceptable", and that Tehran wanted a deal to open the strait to commercial shipping within seven days because "they're losing so badly".
In a post on Telegram, Iranian Foreign Minister Abbas Araghchi acknowledged the rejection but said Iran would wait for a "definitive" official US response, noting the president had made contradictory statements in the past. Araghchi said the conditions for opening the strait were the same as those in a memorandum of understanding between the US and Iran signed in June.
Iran said it had raised reopening the strait and ending hostilities during talks on the sidelines of the UN General Assembly in New York. The rejection was reported by the Financial Times, The Times and The Guardian, among others.
What it means in Bangladesh
This is the story underneath every other energy story this month, and Bangladesh is more exposed to it than most countries of its size.
The Strait of Hormuz is the channel through which a very large share of the world's seaborne crude and, critically, liquefied natural gas passes. Bangladesh's import basket runs directly through it. Crude and refined products for the Eastern Refinery and the diesel market come predominantly from the Gulf. So does LNG, on long-term contracts with Qatar and Oman — and Qatari LNG has no alternative route out. There is no pipeline bypass.
The effects stack rather than substitute. A closed or constrained strait raises the delivered price of crude, of diesel, and of LNG simultaneously. In Bangladesh that shows up as a higher fuel import bill, pressure on the taka, a larger subsidy requirement, and — because a significant share of the country's electricity is gas-fired — a direct constraint on power generation. The industrial version of that constraint is gas rationing to factories, which the country has already experienced.
Three things are worth watching rather than guessing at. Whether the June memorandum is revived, since both sides describe the same conditions. Whether Gulf producers can route more volume through alternatives such as the East-West pipeline across Saudi Arabia, which has limited capacity and cannot carry Qatari LNG at all. And whether Bangladesh's spot LNG purchases continue at prices set in this environment, since spot is where the volatility lands first.
What a fuel importer can do about any of this is limited, which is the honest conclusion. What it can do is hold larger strategic reserves, contract further ahead, and accelerate the domestic generation that does not depend on an imported molecule — the case for which is made, in its solar form, in how oil country took to solar.
