Iran’s retaliatory strikes on Gulf states are now threatening the world’s largest oil and gas export hubs, marking a dangerous escalation from tanker harassment to direct attacks on energy infrastructure.
The shift in attacks raises fears of severed supply as Saudi Arabia and Qatar halted operations at key plants.
Brent crude opened sharply higher on Monday at $81.49 per barrel, then retreated to the $77 range, as traders weighed early fears of disruption against the absence of confirmed large-scale supply losses. However, Brent pushed back closer to $80 following news that Saudi Arabia’s Ras Tanura refinery had been hit.
Following the strike on a Qatari liquefied natural gas (LNG) plant and subsequent halt in production, European gas prices surged to their highest in four years. Dutch front-month futures, which track European gas prices, traded 45 per cent higher at €46.19 ($54.12) a megawatt-hour at 5.17pm UAE time.
The price movement reflects mounting concern that energy infrastructure, including refineries, export terminals and oil and gas fields, could become the next arena for escalation.
“We haven’t seen the peak of it … we haven’t seen the worst of what could happen,” Iman Nasseri, managing director for the Middle East at FGE, said in a webinar on Monday. He warned that the targeting of regional energy infrastructure suggests the conflict is “far from done”.
Sustained attacks on production fields or pipelines would add a significant risk premium and could push oil prices well into the $90–$100 range, he added.
Iranian strikes on energy facilities at Ras Laffan Industrial City forced QatarEnergy to halt operations at the world’s largest LNG plant, which supplies about 20 per cent of global output.
Amena Bakr, head of Middle East energy and Opec+ research at analytics firm Kpler, described the strikes on energy installations as a turning point.
“This marks an escalation,” she told The National. “This opens a new chapter where you’re exposing the entire system, the entire oil facilities in the Gulf to these kinds of attacks.”
Key energy facilities impacted
Ras Tanura: Saudi Arabia’s Ras Tanura, run by Saudi Aramco, halted operations at its 550,000 barrel-per-day refinery following a reported drone strike. Ras Tanura is not only a major refining plant but also home to the kingdom’s largest offshore crude loading terminal, which is critical for the world’s largest oil exporter to meet its supply commitments. Ms Bakr said Kpler sources indicated two refinery units at Ras Tanura were impacted. Aramco had already halted liquefied petroleum gas exports from the nearby Juaymah plant after structural damage to part of the delivery system last week. It is one of the world's largest exporters of natural gas liquids.
Mina Al Ahmadi Refinery: Kuwait’s Mina Al Ahmadi Refinery, with a capacity of around 346,000 bpd, was also affected after debris reportedly fell on parts of the plant. Kuwait witnessed major strikes, with Iran targeting the country’s US embassy. Three US fighter jets were downed in an incident attributed to friendly fire.
Duqm Port: Oman’s southern Duqm Port, which lies outside the Strait of Hormuz, was targeted by drones on Saturday, highlighting the vulnerability of alternatives to the world’s most contentious chokepoint. It is also close to a newly built 255,000 bpd refinery.
Jebel Ali Port: In the UAE, Jebel Ali Port, which is adjacent to a condensate refinery and power facilities, was struck, impacting logistics and raising concerns. Dense smoke was reported from the area. One berth caught fire after the port was struck by debris from an intercepted Iranian missile.
Ras Laffan LNG hub: Qatar said the Ras Laffan Industrial City energy complex had also come under attack and halted operations. The move is hugely significant given that QatarEnergy is the biggest producer of LNG in the world, accounting for 20 per cent of world supply. It operates 14 LNG trains, with a total annual production capacity of 77 million tonnes, making it indispensable to global gas supply, particularly to Asian and European buyers.
Kharg Island: On the Iranian side, Kharg Island, the country’s main crude export terminal, was targeted by US-Israeli strikes. Damage to the facilities would directly constrain Iranian exports, which averaged two million bpd before the latest escalation.
Why infrastructure escalation matters
Global oil markets have historically reacted more sharply to infrastructure disruption than to tanker attacks. The 2019 Houthi strikes on Aramco’s Abqaiq and Khurais facilities temporarily knocked out about 5.7 million bpd, roughly 5 per cent of global supply, triggering one of the largest single-day oil price spikes on record. Ms Bakr noted the market may be underestimating the implications of the current trajectory.
“Right now, at a time where there is limited spare capacity in the system, at a time where you have disruption still in Hormuz, flows are far from normal. This is the risk that the market is underestimating,” she said.
Before the conflict, Kpler data showed an oversupply of roughly 1.5 million bpd for 2026. That buffer could evaporate quickly if refining or upstream capacity is taken offline by prolonged Iranian attacks.
“What is going to shock this market,” she said, “is if we do see supply being impacted or if the market realises this is going to take longer than initially planned.”
Hormuz disruption
Even without official closure of the Strait of Hormuz, insurance premiums and freight rates have surged. Some vessels are avoiding the waterway altogether, rerouting cargoes at high additional cost.
Most of the crude and LNG flowing through Hormuz is destined for Asia. China is relatively well-positioned due to large stockpiles accumulated last year through aggressive buying of discounted Russian and Iranian barrels.
India, with fewer strategic crude reserves and with only around nine to 10 days of stocks, is more exposed to prolonged disruption. Europe, which has sought more Middle East gas cargoes since Russia invaded Ukraine in 2022, faces high gas prices and sustained loss of supply.
The next escalation risk
Gulf oil and gas facilities remain exposed. Major offshore fields in Abu Dhabi operated by Abu Dhabi National Oil Company and its partners sit close to Iran. Saudi Arabia’s oil and gasfields are concentrated in its Eastern Province. The kingdom’s East-West Pipeline, capable of transporting up to five million bpd to Red Sea terminals, was targeted by the Houthis in 2019.
While Gulf assets are bracing for more attacks from Iran, Mr Nasseri also noted the risk of disruption cuts both ways. Iran produces more than three million barrels per day, and major damage to its own export system, particularly at Kharg, would represent a meaningful supply loss to the market.
