Critical Gulf Energy Assets Struck
Escalation of Conflict in the Persian Gulf
The recent attacks on oil and gas infrastructure in the Persian Gulf region have marked a significant escalation in the ongoing tensions between the U.S. and Israel against Iran. These incidents have not only intensified the conflict but also exacerbated an energy-supply crisis that is quickly spreading across the globe.
Key Energy Facilities Targeted
One of the most notable attacks occurred when Israel targeted facilities at Iran’s South Pars, which is part of the world’s largest gas field shared with Qatar. This facility produces 730 million cubic meters of gas daily, primarily serving Iranian users. In response to these attacks, Iran retaliated by targeting several energy facilities in Qatar, Saudi Arabia, and Kuwait.
In Qatar, the Ras Laffan Industrial City, home to the world’s largest liquefied-natural gas plant, was attacked twice. Iranian ballistic missiles caused extensive damage to the Pearl GTL, the world’s largest gas-to-liquids plant, developed through a partnership of Shell and QatarEnergy. Additionally, a missile barrage was fired at Riyadh, with debris landing near a refinery that serves the domestic-fuel market.
Ongoing Attacks and Their Impact
The attacks continued into Thursday, with drone strikes hitting Kuwait’s Mina Abdullah and Mina Al-Ahmadi refineries. While fires are under control, operations at both refineries have been suspended. To the west, Saudi Arabia’s Samref refinery in the Red Sea port city of Yanbu was also hit. A ballistic missile was fired toward the Yanbu port but was intercepted.
The port is crucial for Saudi oil exports. With the effective closure of the Strait of Hormuz, the kingdom has relied heavily on pumping crude through its east-west pipeline to the port of Yanbu, and from there to global markets. Disruptions there could remove 5 million to 6 million barrels a day from the market and potentially push oil prices to $150 or higher, according to Aditya Saraswat, an analyst at Rystad Energy.
Historical Context and Recent Incidents
On March 13, the U.S. bombed military targets on Kharg Island, a small landmass that serves as the launch point for roughly 90% of Iran’s oil exports. Although oil facilities on the island were spared, President Trump warned that he would reconsider if Iran didn’t open the Strait of Hormuz to international shipping.
The Shah gas field, located southwest of Abu Dhabi and home to the world’s largest ultrasour gas operation, faced a drone strike on Tuesday. The fire there is under control, but operations have been suspended. Ultrasour gas is used to produce petrochemical feedstock and methane for heating and cooking.
Regional Impacts and Concerns
Saudi Aramco’s Berri oil field experienced minor damage on March 7 due to debris from an intercepted drone. Several Iranian fuel-storage facilities in Tehran belonging to the Islamic Revolutionary Guard Corps were struck that day. Saudi Arabia’s Ras Tanura oil refinery suspended operations after an Iranian drone hit an oil-storage facility at the site. The complex was again targeted on March 4, but the refinery has since restarted.
The United Arab Emirates’ port of Fujairah, a hub for oil loadings outside the Strait of Hormuz, has been repeatedly hit by drones. It is also a hub for oil storage, trading, and ship refueling. Operations at the port have been inconsistent for days, raising concerns about the vulnerability of alternative oil routes that bypass the strait.
Global Consequences
Iran has repeatedly targeted tankers near the Strait of Hormuz, the maritime chokepoint through which 20% of the world’s oil and liquefied-natural gas supply passes. These attacks have alarmed shipowners, charterers, and seafarers, reducing traffic in the Strait of Hormuz to a trickle. Between March 1 and March 18, there were only 98 transits through the strait, marking a 96% drop compared with the latter half of February, according to S&P Global Market Intelligence.
