Iran war puts at risk key pipelines, terminals and refineries that supply the world with oil and gas

The Iran conflict has triggered a global energy crisis as critical infrastructure across the Middle East faces attacks and shutdowns, endangering the flow of oil and gas that powers the world economy.

Iranian drone strikes have damaged key facilities, while fears of further attacks have effectively closed the Strait of Hormuz, a vital maritime passage that handles approximately 20% of global oil and liquefied natural gas shipments. The crisis has rapidly escalated, with storage facilities filling up and forcing production cuts across the region.

“A lot of very critical energy infrastructure has been either forced to shut down because of direct damage from drones and missiles, or because production is effectively being shut in as a result of shipping grinding to a halt,” said Torbjorn Soltvedt, principal Middle East analyst at risk intelligence company Verisk Maplecroft. “We’re already starting to see some of the global ramifications of that.”

The market response has been swift and severe. International benchmark Brent crude has surged from $72.97 the day before hostilities began to nearly $103 on Monday. This price shock is rippling through the global economy, increasing costs for transportation, manufacturing, and agriculture.

Among the most significant disruptions is the shutdown of Qatar’s Ras Laffan terminal, the world’s largest LNG export facility. State-owned QatarEnergy has declared force majeure following drone attacks, upending global gas markets. Qatar produces 20% of the world’s liquefied natural gas, primarily supplying Asian markets. European buyers are now facing intensified competition for remaining supplies as winter approaches.

In Saudi Arabia, Aramco’s largest refinery at Ras Tanura port temporarily ceased operations after drone strikes caused fires at the facility. The country’s East-West pipeline, which normally allows oil to bypass the Hormuz chokepoint by connecting processing centers near the Persian Gulf to Red Sea ports, is also under threat.

The United Arab Emirates’ Fujairah oil terminal, a strategic facility that handles very large crude carriers on the Gulf of Oman, has reportedly experienced disruptions. The terminal is particularly important because it allows Abu Dhabi to export oil without traversing the Strait of Hormuz.

“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,” Soltvedt noted.

Iran’s own Kharg Island, which previously handled almost all of the country’s approximately 1.6 million barrels per day of crude exports (primarily to China), now faces uncertain operational status. Reports indicate Iran accelerated shipments in anticipation of conflict.

Israel’s Energy Ministry has ordered the shutdown of the Leviathan natural gas field, located 130 kilometers off Haifa’s shores. As the Mediterranean’s largest gas reservoir and a key supplier to Egypt, its closure threatens regional energy security. A previous shutdown during Israel’s 12-day conflict with Iran in June forced Egypt to reduce gas supplies to industrial users, including fertilizer producers.

In Iraq, dwindling storage capacity has forced the suspension of 1.5 million barrels per day of production at the Rumaila and West Qurna fields. Rumaila is classified as a “supergiant” field, containing more than a billion barrels in reserves. Rystad Energy warns that other Gulf countries face similar storage constraints, which could lead to additional production halts.

Industry experts caution that these shutdowns may have lasting consequences. “Even if the Strait of Hormuz reopens in a few days, 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,” said Soltvedt. “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.”

Other critical infrastructure at risk includes Iraq’s Al Basra Oil Terminal, an artificial island in the Persian Gulf that exports oil representing 80% of the country’s annual GDP. Bahrain’s Sitra Island refinery, which processes domestic crude and supplies from Saudi Arabia, has halted operations following missile strikes, disrupting jet fuel and diesel supplies throughout the kingdom.

The escalating crisis threatens to destabilize global energy markets further if diplomatic efforts fail to reduce tensions in the region.