Exchange of fire threatens key Gulf energy facilities, risks longer price shocks
Escalating attacks on energy infrastructure across the Persian Gulf have raised the risk that early price shocks tied to the Iran-Israel war could deepen and last, affecting costs from gasoline and electricity to fertilizer and industrial inputs used for electronics. The pattern of tit-for-tat strikes, involving attacks on oil and gas facilities in multiple Gulf states, has also increased concerns about extended disruption as restart timelines for damaged facilities stretch beyond the initial shocks.
The sequence began with an Israeli attack on a natural gas field that supplies most of Iran’s gas, according to the report. Iran then launched strikes on key Gulf infrastructure on Thursday in retaliation, heightening fears that what began as localized disruptions could harden into longer-term shortages and higher prices.
The Strait of Hormuz has been a central pressure point in the escalation, with gulf producers cutting output after the threat of Iranian strikes blocked most tanker traffic through the chokepoint. Even if the strait becomes safe for tanker transit soon, the report said it would take time for oil and gas to resume flowing because of the complexity of restarting refineries and other facilities, with potentially further delays if infrastructure has been damaged.
The report said the impact is being felt especially across Asia, which receives much of the oil and gas exported from the region. It cited adjustments including government offices in the Philippines opening only four days a week and directives to limit the use of air conditioning, while Vietnam urged people to work from home.
Beyond oil and gas, the report pointed to disruptions in other commodities that move through the same region and logistics networks. It said key raw materials such as helium used to make computer chips and sulfur used in fertilizer production were obstructed and could become scarce, raising the prospect of higher prices through the supply chain down to goods bought by consumers.
In Qatar, the report said the Ras Laffan liquefied natural gas terminal — described as the largest LNG export facility in the world — suffered “extensive” damage after being attacked Thursday. It said QatarEnergy had already shut the terminal down following a drone strike, and that Ras Laffan draws gas from the North Field, the Qatar-controlled portion of the shared South Pars gas field with Iran.
The report also described Iran’s South Pars as a critical part of its energy system. It said South Pars is the world’s largest natural gas field and is split between Iran and Qatar, with the Iran-controlled portion supplying much of the natural gas used to heat homes and generate electricity in Iran. The report said an Israeli strike at facilities connected to the field at Asuleyah contributed to Iranian threats to attack oil and gas sites elsewhere in the Gulf, and warned that losing natural gas from South Pars would worsen conditions for civilians given Iran’s existing electricity production challenges.
Additional facilities named in the report included Kharg Island, a tanker terminal that has handled nearly all of Iran’s prewar crude exports; the report said the island has continued to see some loading even as Trump warned on social media about potential U.S. action if Iran continued striking Qatar’s energy infrastructure. It also described Saudi Arabia’s East-West pipeline, which routes crude from Abqaiq to the Red Sea port of Yanbu to bypass the Hormuz chokepoint, while noting it may not have enough capacity to fully compensate if Hormuz remains disrupted.
The report cited disruptions in several other Gulf states, including a terminal in Fujairah in the United Arab Emirates for oil tankers on the Gulf of Oman, and fires at refineries in Kuwait after a drone attack that Kuwait Petroleum said had been extinguished Thursday. It also said a $800 million liquid petroleum gas facility at Port of Salalah in Oman was suspended as a precaution after drone strikes, and that operations were suspended Tuesday at Abu Dhabi’s Shah gas field, which supplies about 20% of Abu Dhabi’s natural gas and is a major supplier of sulfur used to make fertilizer.
On the question of threats and potential escalation, the report said U.S. President Donald Trump told followers on social media that Israel would not attack South Pars again, but warned that if Iran continued striking Qatar’s energy infrastructure, the U.S. would retaliate and “massively blow up the entirety” of the field.