Following reports on surging rebranded Iranian liquefied petroleum gas (LPG) exports to Bangladesh, its Central Bank warned all domestic banks to stay alert regarding the import of products from countries that are subject to global sanctions.
Similar instructions have been incorporated into Bangladesh Bank's anti-money laundering and terrorist financing policy, a source told local Business Standard newspaper.
LPG, a mixture of heavier gases such as propane, butane, and pentane (rather than methane or natural gas), is a petroleum product and ranks among Iran's top non-oil exports.
According to Iran’s customs statistics, the country exported $2.2 billion worth of LPG, along with $1.7 billion of pure propane, $1.1 billion of pure butane, and $1 billion of other heavy gases during the first half of the Iranian fiscal year, which began on March 21. Iran classifies these raw petroleum products as non-oil exports. Collectively, petroleum gases account for 24% of the country’s non-oil exports.
Iran exports 11-12 million tons of LPG annually, mostly to China, earning approximately $8 billion.
A day after the Central Bank’s warning, Lloyd's List reported on January 18 that, amid concerns over Chinese buyers hesitating to risk violating US sanctions, a very large crude carrier suspected of transporting Iran-origin LPG to China made an unusual U-turn in December. After spending two weeks at anchor, the vessel discharged its cargo in Bangladesh.
In October 2024, The Business Standard, a Bangladeshi publication, reported that the LPG Operators Association of Bangladesh (LOAB) had raised concerns about the growing imports of Iranian LPG. According to the report, Iran has been offering Bangladeshi buyers prices $40–$50 per ton below market rates, with monthly LPG exports to Bangladesh recently reaching 150,000 tons. This surge has enabled Iran to capture a quarter of Bangladesh's LPG market.
The newspaper published a letter from LOAB to port authorities and the central bank, listing several tankers suspected of carrying Iranian LPG in Bangladeshi waters. The letter warned that, aside from the potential sanctions-related consequences, Iran's underpricing disrupts the competitive energy market in the country.
Mahammed Jamal Hosen, representing the Bangladesh LPG Distributors and Dealers Welfare Association, said in the letter that "Many banks will face direct consequences of potential US sanctions, and in the long term, Bangladesh's reputation as a destination for foreign direct investment will be at risk."
The letter identified a dozen companies that allegedly forged Iranian LPG documents through intermediaries in the UAE, particularly Dubai, and rebranded the shipments as LPG from Iraq's Basra Gas Company before routing them to Bangladesh.
The Business Standard says “for instance, in August 2024, two local LPG companies imported over 10,000 tons of LPG on a vessel named G YMM. The documents submitted to customs and port authorities showed the liquid gas came from Basrah Gas Company in Iraq. However, The Business Standard on 6 September obtained a response from Andrew Wiper, managing director of Basrah Gas, confirming that the vessel G YMM has never loaded LPG from his company”.