A prolonged conflict between Saudi Arabia and Yemen’s Iran-backed Houthi forces could open up a multi-front crisis for Bangladesh’s economy, with the labour market and remittances the most exposed. Saudi Arabia hosts more than 4 million Bangladeshi workers, making it the country’s largest overseas labour market, and remains its biggest source of foreign remittances.
Riyadh is also among the key suppliers of fuel, fertiliser and industrial raw materials. Because the Saudi-Houthi theatre lies close to the Suez Canal and the Bab el-Mandeb strait, international shipping is at risk too — raising the prospect of disrupted imports and exports and higher transport costs.
Economists warn that if these pressures intensify simultaneously, they could strain remittances, trade, energy security and domestic inflation, putting Bangladesh’s wider economy under considerable pressure.
The economic effects of the conflict are already emerging in Saudi Arabia’s domestic activities and international business links. Repeated Houthi attacks on Riyadh’s King Khalid International Airport have been followed by hundreds of flight cancellations, while international airlines have restricted services to the kingdom. Investment, construction, tourism and other business activities could slow if the conflict persists, affecting the earnings and employment of the large number of Bangladeshis working there.
Saudi Arabia is Bangladesh’s largest overseas labour market. In 2025, a total of 755,194 Bangladeshis went to the kingdom for employment, accounting for roughly two-thirds of all Bangladeshis who travelled abroad for work that year. A further 276,877 went in the first eight months of 2026. Figures from the Bureau of Manpower, Employment and Training (BMET) show that 32,915 of the 70,304 Bangladeshis who went abroad for work last month, or nearly 47 percent, were bound for Saudi Arabia.
The kingdom is Bangladesh’s largest source of remittances, with central bank figures showing remittance receipts from Saudi Arabia reaching $5.85 billion in the 2025–26 fiscal year. Between January and August 2026, Bangladesh received $25.15 billion in total remittances, of which $4.45 billion, or about 17.7 percent, came from Saudi Arabia.
Zahid Hussain, former chief economist at the World Bank’s Dhaka office, told Bonik Barta that inflation in Saudi Arabia caused by the war would raise living costs for Bangladeshi workers. Higher spending on housing, food and other necessities could reduce their savings and affect the amount they send home.
“A contraction in the Saudi economy could put pressure on Bangladeshi migrant workers’ earnings and employment,” he said.
Hussain warned that given the significant share of Bangladesh’s annual labour migration directed towards Saudi Arabia, even a temporary disruption in its labour market could adversely affect new employment and labour exports.
On energy, Hussain said various forecasts indicated that oil prices would remain above $100 a barrel for a prolonged period, increasing pressure on Bangladesh. The regional situation could make fuel imports less predictable, leaving uncertainty over whether the country could secure the volumes it needed even at higher prices.
“A prolonged conflict involving Saudi Arabia and the wider Middle East could adversely affect Bangladesh’s remittances, labour market, fuel supplies and overall economy,” he said.
Bangladesh consumes about 6.5 million to 7 million tonnes of fuel oil a year, including 1.4 million to 1.5 million tonnes of imported crude. Saudi Aramco supplies about 750,000 tonnes of Arabian Light Crude, while Bangladesh also buys crude from Abu Dhabi National Oil Company (ADNOC). The imported crude is processed at Eastern Refinery into 13 types of petroleum products including diesel, bitumen and petrol.
Bangladesh has relatively few suppliers of crude oil. The Bangladesh Petroleum Corporation’s supplier list includes Saudi Aramco and ADNOC. If a prolonged conflict disrupts production, export terminals, ports or regional shipping routes, Bangladesh could face not only higher international prices but also uncertainty over timely crude deliveries.
The country also relies heavily on imports of refined fuel, and any disruption to regional shipping routes or increases in insurance and freight costs could make fuel imports from alternative sources more expensive.
M Masrur Reaz, chairman and chief executive of Policy Exchange Bangladesh (PEB), told Bonik Barta that global energy supplies and prices, particularly those of crude oil, depended heavily on Saudi Arabia and that a major disruption there could significantly affect crude supplies and prices.
“Bangladesh is already facing energy shortages,” he said, “and further constraints on LNG supplies or higher prices, combined with an oil shortage or a substantial increase in import costs, can adversely affect the balance of payments, import capacity and overall import expenditure.”
Reaz also warned that a prolonged war could affect the global economy, adding that “weaker consumer spending and economic activity in developed countries could reduce demand for Bangladeshi exports.”
He called for identifying and analysing potential areas of exposure and adopting precautionary policies, while securing alternative labour markets and energy sources over the longer term.
Fertiliser is another important commodity Bangladesh imports from Saudi Arabia. The Bangladesh Chemical Industries Corporation imports urea from the kingdom, while the Bangladesh Agricultural Development Corporation imports diammonium phosphate (DAP). According to BADC, 11 shipments of DAP from Saudi Arabia are due between January and December 2026. Five shipments totalling 200,000 tonnes have already arrived, while arrangements are underway to bring in the remaining consignments by the end of November.
A BADC official speaking on condition of anonymity said the agency did not know whether the war would expand further, but suppliers had not indicated any uncertainty over DAP deliveries so far. He added that BADC remained in regular contact with them. An expansion of the conflict could, however, disrupt the import process.
Bangladesh has arranged to import 520,000 tonnes of urea from Saudi Arabia under a government-to-government agreement in the 2026–27 fiscal year, according to BCIC. Of this amount, 320,000 tonnes are covered by firm purchases and the remaining 200,000 tonnes by an optional contract.
Two ships carrying urea from Saudi Arabia are expected to arrive on October 16 and 22. Loading arrangements for two more shipments for November are underway.
Following tensions around the Strait of Hormuz, Saudi supplier SABIC Agri-Nutrients has changed its loading port twice. Supplies have continued so far, but uncertainty remains over how sustainable alternative routes would be if the regional conflict widened.
Md Moniruzzaman, BCIC’s director for commercial affairs, production and research, told Bonik Barta that he saw no immediate risk to urea imports, although the future situation remained uncertain.
Investment ties between Bangladesh and Saudi Arabia remain relatively limited. Bangladesh Bank figures show that Saudi Arabia’s cumulative foreign direct investment (FDI) stock in Bangladesh stood at $235.16 million at the end of 2018, falling to $35.17 million by December 2025.
The government has recently stepped up efforts to attract more Saudi investment. During a visit to Bangladesh in July, a high-level Saudi delegation met Prime Minister Tarique Rahman and expressed interest in investing billions of dollars in ports and other sectors.
In August, Saudi Crown Prince Mohammed bin Salman formally invited Rahman to visit the kingdom. Bangladesh sees increasing bilateral trade and investment as an important objective of the proposed visit.
Prolonged instability in Saudi Arabia’s security and economic conditions, however, could create uncertainty over the timetable for implementing new investment plans.
Ashraful Haque Chowdhury, president of the Saudi-Bangladesh Chamber of Commerce and Industry (SABCCI), told Bonik Barta that Saudi Arabia generates about $5 billion in annual remittances for Bangladesh, while absorbing about $400 million in Bangladeshi exports. “Bangladesh also imports energy, petroleum products and fertiliser from there. The effects could therefore extend across the labour market, remittances, trade and imports,” he said.
The conflict has also raised concerns about the safety of Bangladeshis working in Saudi Arabia. Two Bangladeshis were among the 13 people killed in a Houthi attack on Riyadh’s King Khalid International Airport on October 10. Another 24 Bangladeshis were injured. A further escalation could increase security risks for Bangladeshi workers in the kingdom.
The escalating conflict was worrying because marginalised communities tended to bear the greatest burden in such situations, Dr Tasnem Siddiqui, acting executive director of the Refugee and Migratory Movements Research Unit (RMMRU), told Bonik Barta.
Bangladeshi workers have already been killed or injured, she said, warning that prolonged hostilities would put their lives and livelihoods at risk. “At the same time, a decline in migration to Saudi Arabia can’t be ruled out.”
Siddiqui said the government needed to look beyond immediate or small-scale measures and develop a long-term strategy to place more skilled workers in overseas labour markets. “That requires changes to the country’s education and skills development systems. A larger pool of skilled workers will reduce the migration sector’s vulnerability to disruptions in any single market, including Saudi Arabia or Malaysia,” she added.
State Minister for Foreign Affairs Shama Obaed Islam said the conflict would have some short-term effects on Bangladesh but expressed hope that the country could overcome them over time by finding new overseas labour markets.
Speaking to reporters after a seminar in Dhaka yesterday titled “Foreign Policy of Bangladesh: Navigating Pathways in a Shifting World”, the state minister noted that more than 3 million Bangladeshis worked in Saudi Arabia and said the conflict would inevitably have some effect. She added that the government was looking for new destinations for migrant workers.
Shama Obaed said some Bangladeshis in Saudi Arabia had already lost their jobs, some had been forced to return home and others remained without employment. The situation could also affect remittance inflows, she said.
On energy supplies, the state minister said the government had received no information about any disruption so far. “The government is working towards energy self-sufficiency. Besides exploring new sources of fuel, discussions are continuing with Saudi Arabia on existing energy cooperation.”