Iran war threatens Persian Gulf oil and gas links from LNG to refineries

Body

The Iran war is threatening critical oil and gas infrastructure across the Persian Gulf, putting at risk the pipelines, refineries and shipping terminals that move energy from the region to global markets, the Associated Press reported March 9. The report said strikes by Iranian drones have disrupted operations at some facilities, while the broader risk of strikes has effectively shut down the Strait of Hormuz—an important chokepoint for crude oil and liquefied natural gas.

The disruption has contributed to price spikes, with international benchmark Brent crude rising from $72.97 in the day before the war started to almost $99 on Thursday, according to the Associated Press. The report also said oil fields in the region have cut back output as storage fills and that Qatar has shut down exports, adding pressure to markets that rely heavily on Gulf supply.

Ras Laffan, Qatar’s liquefied natural gas terminal, was shut down by state-owned QatarEnergy following a drone strike, the Associated Press said. The company cited force majeure, describing that it is unable to supply contracted customers because of circumstances beyond its control. The report said Ras Laffan is QatarEnergy’s largest LNG export facility and draws gas from the world’s largest single gas field, chilling it for loading onto tankers that primarily ship to Asia, and that gas purchasers in Europe have also been affected by sharply higher prices.

The AP report cited Ras Tanura port and refinery in Saudi Arabia as another key node at risk. It said the facility, located on the Persian Gulf northeast of Dammam and operated as Saudi Aramco’s largest refinery and a port capable of accommodating large tankers, was temporarily shut down after a drone impact caused a fire.

The report also described a route intended to bypass Hormuz. Saudi Aramco operates an East-West pipeline from the Aqaiq oil processing center near the Persian Gulf to the Yanbu port on the Red Sea, allowing exports to avoid the Hormuz chokepoint, but the AP said the pipeline lacks enough capacity to fully make up for the Hormuz closure.

In the United Arab Emirates, the AP report said the Fujairah oil terminal—on the Gulf of Oman and a key place for oil tankers—was initially disrupted by fighting but had resumed operations by Friday, citing the Lloyd’s List shipping industry publication. The report also quoted Torjborn Soltvedt, principal Middle East analyst at risk intelligence company Verisk Maplecroft, saying “Iran’s targeting of oil storage in Fujairah isn’t a coincidence; it’s attacking one of the potential reroutings of oil that’s been trapped in the Persian Gulf.”

Across the border, the Associated Press said Iran’s Kharg Island tanker terminal has handled almost all of Iran’s roughly 1.6 million barrels per day of prewar crude exports, most of it going to China. It said Iran has exported 13.7 million barrels since the war started, and that “multiple” tankers were seen on satellite imagery Wednesday loading at Kharg, according to TankerTrackers.com.

The AP report also highlighted Iran’s Jask Terminal, which it described as enabling export of Iranian oil without going through the Strait of Hormuz. The report said the facility has limited capacity but that data and analytics firm Kpler reported a tanker loaded 2 million barrels on March 7, the first shipment from the facility since 2024.

Other parts of the region faced shutdown orders and disruptions as well. In Israel, the Associated Press said the Energy Ministry directed operator Chevron to shut down the Leviathan natural gas field, located about 10 kilometers (6 miles) off the coast of Dora, citing the security situation. It described the field as the largest natural gas reservoir in the Mediterranean and a key supplier to Egypt, noting that a shutdown during Israel’s 12-day war with Iran in June contributed to Egypt curtailing gas supplies to industries including fertilizer producers.

The AP report said Southern Iraqi oil fields have also seen cutbacks, with Iraq reducing output at Rumaila and West Qurna due to dwindling storage. It described Rumaila as a so-called supergiant holding more than a billion barrels in reserves. The report added that Iraq and other Gulf countries are running out of space to put oil, which could lead to longer-lasting interruption because once wells are shut down, oil and gas wells may need weeks or months to resume.

On restart timelines, the report quoted Soltvedt as saying: “it’s going to take time to restart production in some of these fields. It’s not a switch that can be turned on and off,” and that “It’s the same for Qatar in terms of their LNG facility. It will probably take weeks to get some of the facilities up and running again.” The Associated Press also described Iraq’s Al Basra Oil Terminal—an artificial island 50 kilometers (30 miles) from shore—saying it exports oil worth 80% of Iraq’s annual GDP and has ceased operations, with two tankers hit in Iraqi territorial waters.

The AP report said Bahrain’s Bapco refinery, including the Sitra Island refinery, was hit after a missile strike halted operations and disrupted jet fuel, diesel and other supplies. In Oman, it said the Salalah port and gas products facility, which the report described as a $800 million site producing liquid petroleum gas for export to Asia and located outside the Strait of Hormuz, was suspended as a precaution after drone strikes, citing Lloyd’s List.