The fire across the water: I called this. Here Is what comes next
Operation Shield of Judah has begun. Bangladesh must act now, not after the crisis is visible in the numbers
Weeks ago, I assessed the probability of a US-Iran war at 80% and rising through TV talk shows and on my personal profile.
I identified China's quiet citizen evacuation order as the single most important leading indicator. When Beijing moves people out early, it has already war-gamed the outcome. I flagged Pakistan's consolidation of its Afghan border as a signal that GHQ Rawalpindi had received credible intelligence about the timeline. And I argued that the combination of Rubio-Netanyahu coordination, US embassy departure notices, and Trump's stated position of "no enrichment, not 20%, not 30%" made a negotiated outcome mathematically impossible.
On the night of February 28, 2026, Operation Shield of Judah began. United States and Israeli forces struck Tehran, Qom, Kermanshah, Isfahan, and Karaj simultaneously. The presidential palace, the National Security Council building, and the district where Supreme Leader Khamenei resides were all targeted. This is not a limited strike on nuclear infrastructure. President Trump has described it as "massive and ongoing" and has explicitly invoked regime change as an objective.
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Iran has already retaliated. Missiles were intercepted over Qatar. Explosions struck Bahrain, targeting the US Navy's 5th Fleet headquarters. Sirens sounded in Abu Dhabi and Kuwait. Gulf airspace is closed. A senior Iranian official has declared that "all American and Israeli assets and interests in the Middle East have become a legitimate target" and that "there are no red lines after this aggression."
The war that nobody wanted but everybody saw coming is here. The question is not whether Bangladesh will be affected. It is whether the people responsible for managing this country's economy were paying attention.
Oil: The first and most immediate shock
Brent crude will spike to $110-130 within 48 to 72 hours regardless of what happens at the Strait of Hormuz. Markets do not wait for confirmation. They price the worst-case scenario first and revise downward later.
If Iran moves to close the Strait, through which roughly 20% of all globally traded oil and LNG passes, the range extends to $150-180 per barrel. Iranian officials have already said there are no red lines. A regime fighting for survival does not make economically rational decisions. Bangladesh imports virtually all of its petroleum. Every taka of foreign exchange reserve becomes more precious by the hour.
The Taka: An impossible choice
Bangladesh Bank faces a dilemma it has been quietly avoiding for months. It can defend the exchange rate, maintaining the taka's value at the cost of crushing domestic credit and economic activity. Or it can allow the taka to depreciate, importing an inflation spiral on top of an oil shock that is already underway.
There is no clean option. My expectation is managed depreciation combined with emergency IMF engagement. The taka will weaken. Import costs will rise. The people who will feel this first and hardest are not reading financial analysis in English. They are buying cooking oil and paying for CNG in Mirpur and Mohammadpur and every district town across the country.
Remittances: The underappreciated transmission channel
Approximately 2.5 to 3 million Bangladeshi workers are employed in Gulf states, primarily Saudi Arabia, the UAE, Qatar, and Kuwait. This is the transmission channel that most macro models of Bangladesh's economy consistently underestimate.
Saudi Arabia, UAE, and Qatar are all currently under Iranian missile threat. Their governments will contract spending, freeze construction projects, and reassess labor requirements in a wartime environment. Bangladeshi workers will not be the first priority of Gulf governments managing their own security crises. Bangladesh needs to be making calls to Riyadh, Abu Dhabi, and Doha today, not after the labor market data arrives next quarter.
Gold and the Dollar System: A structural shift accelerating
Gold was trading at $5,216 per ounce before the strikes began. It will open above $5,500 on Monday and will likely press toward $6,000 if Hormuz disruption is confirmed. This is not a speculative trade but a structural repositioning that central banks in China, India, Russia, and the Gulf have been executing for two years through historically unprecedented gold purchases.
The weaponization of the SWIFT system against Russia in 2022 permanently changed every sovereign nation's threat model. The dollar system is not collapsing overnight. But the direction of travel is now unmistakable, and a major Middle East war with regime change as its stated objective accelerates every de-dollarization dynamic that was already underway.
The Dhaka Stock Exchange: Brace for Sunday
The Dhaka Stock Exchange opens Sunday morning into a fundamentally altered world. Expect circuit breakers. Remittance inflows are the foundation of the low-cost deposit base that Bangladesh's private banks depend on for profitability.
Investors who moved to cash positions over the past two weeks will have options. Investors who did not will be waiting for a recovery that, in a prolonged conflict scenario, could take a while. The circuit breaker mechanism was not designed for a shock of this magnitude and speed.
Inflation: The channel that matters most for ordinary Bangladeshis
Fuel costs are embedded in the price of everything: transport, fertilizer, electricity generation, food production and distribution. A sustained $130+ oil environment produces food inflation that monetary policy alone cannot address. The government will face enormous pressure to subsidize fuel costs. At current reserve levels, it cannot do so without imposing serious fiscal strain.
Bangladesh will be forced to choose between fiscal pain, absorbed by the government through deficit spending and reserve drawdown, and social pain, absorbed by households through higher prices. There is no third option. The choice made in the next two to four weeks will determine which groups bear the burden of a war they had no part in starting.
What the government must do immediately
This is not a moment for committees and consultation processes. The government must act across five fronts with urgency.
First, engage the IMF and World Bank immediately for emergency buffer financing. Do not wait until reserve pressure is visible in the public data. By then the cost of the facility will be higher and Bangladesh's negotiating position will be weaker.
Second, rationalize fuel subsidies immediately but design targeted cash transfers to protect the bottom three income deciles. Blanket subsidies Bangladesh cannot afford in a $130 oil environment. Targeted protection it can, and must.
Third, activate real-time monitoring of Gulf labor market conditions. Remittance intelligence is now a national security input, not merely an economic statistic. BMET and the foreign ministry need to be in daily communication with labor attaches and employer networks across Saudi Arabia, UAE, Qatar, and Kuwait.
Fourth, the government should reach to Gulf heads of government to secure contract protection commitments for Bangladeshi workers before Gulf labor markets begin contracting. Bilateral goodwill is easier to mobilize before a crisis than during one.
Fifth, initiate an emergency review of DSE market stabilization mechanisms. BSEC needs a playbook for sustained multi-week market disruption, including consideration of temporary short-selling restrictions and coordination with institutional investors to prevent disorderly selling.
Bangladesh did not choose this war. The universal reluctance of every regional actor was not enough to stop it. Bangladesh now faces the consequences through three transmission channels, energy costs, remittances, and currency pressure, that were identifiable weeks ago and are now unavoidable. The question was never whether this would affect us. The question was always whether we would be ready.
The fire is across the water. But in an interconnected world, the heat reaches everyone.
Sajid Amit is a practitioner in international development with experience in Morgan Stanley, and a graduate of Dartmouth College and Columbia University.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
