Iran launched retaliatory strikes on energy infrastructure in nearby Gulf states after Israel struck the Iranian portion of the South Pars gas field Wednesday, a move officials called a “dangerous escalation” that sent oil prices higher.
Iran ordered evacuations at energy assets in Qatar, Saudi Arabia and the United Arab Emirates, saying the facilities had become “direct and legitimate targets,” according to semi-official Mehr News Agency. The Islamic Revolutionary Guard Corps warned local rulers they had been repeatedly cautioned against “gambling with the fate of their nations.”
Qatar and the UAE sharply criticized Israel’s initial attack; Qatar’s foreign minister called it a “dangerous & irresponsible step,” while the Qatari Foreign Ministry also condemned Iran’s subsequent strikes as a “dangerous escalation” and a violation of sovereignty. Among Iran’s retaliatory strikes, its forces hit the Ras Laffan liquefied natural gas (LNG) terminal in Qatar — the most serious attack on Qatari energy facilities since the war began. QatarEnergy reported fires and “extensive damage.”
President Donald Trump said in a social media post that neither the U.S. nor Qatar were aware Israel would attack the South Pars field and urged Israel not to repeat the strike unless Iran again attacked Qatar’s LNG facilities. He warned that if Iran attacked Qatar’s LNG again, the U.S. would respond and “massively blow up” the South Pars field, though he said he did not want to authorize such destruction because of long-term implications for Iran.
Later, Saudi energy facilities were struck by missiles and drones, the Saudi Ministry of Defense said, and missiles targeted the Habshan gas facilities in Abu Dhabi, the UAE’s Foreign Ministry reported. The UAE called the strikes a terrorist attack that threatened regional stability and global energy security.
Iran’s list of targets included Ras Laffan and other facilities producing refined products such as gasoline, diesel and jet fuel, but not crude oil. Kpler analyst Matt Smith noted the potential targets could affect more than 1.25 million barrels per day of refining capacity in the region; global refining capacity was about 103.5 million barrels per day in 2023. While that loss would be roughly 1% of global refining capacity, analysts warned it could still raise fuel prices and have outsized effects on consumers. Patrick De Haan of GasBuddy said attacks on refining facilities could affect pump prices more than crude disruptions. Smith called the strikes an “upping of the ante” in response to the targeting of Iranian gas infrastructure.
Following the strikes, U.S. oil rose nearly 3% to about $99 per barrel and global benchmarks climbed roughly 5% to about $108 a barrel. The situation is compounded by near-closure of the Strait of Hormuz — a key shipping route for roughly 20% of the world’s oil — further constricting global supply.
