The energy sector in the Gulf is facing a challenging path to recover from the damages inflicted by the ongoing Iranian war. Industry experts warn that it will take years of dedicated efforts to restore the vital oil and gas infrastructure that has been critically affected. This article delves into the scope of the damage and what lies ahead for the region’s energy market in the aftermath of the conflict.
Severe Impact on Oil and Gas Facilities
The conflict, which has persisted since late February, has caused near-total paralysis of oil and gas facilities and refineries across the Arabian Gulf. Despite diplomatic efforts led by U.S. President Donald Trump, experts and the International Energy Agency have indicated that it will take years to repair the structural damages and overcome supply disruptions. As reported by Bloomberg, over 40 critical facilities in nine countries have been targeted by attacks.
Casualties of the Conflict
Among the most significant casualties of this disruption is Qatar’s Ras Laffan station, the world’s largest liquefied natural gas facility. Official estimates suggest that restoring the affected production units could take up to five years. Missile strikes have resulted in a loss of approximately 24% in condensate exports and 13% in Qatari liquefied petroleum gas, creating a substantial gap in energy supplies flowing to European and Asian markets.
Challenges in Field Operations
Engineers at Rystad Energy explain that restarting fully halted fields is not an immediate task; it may require two to five weeks to slowly build pressure in subsurface systems and pipelines. While Saudi Aramco works to regain production from impacted fields, technical risks such as corrosion and wax buildup in dormant wells continue to hinder a swift return to pre-war output levels.
Disruptions at Major Refineries
Major refineries in the region have faced involuntary shutdowns, notably the Ruwais refinery in the UAE, the Al Ahmadi refinery in Kuwait, and the Ras Tanura facility in Saudi Arabia. These closures result either from direct targeting or precautionary measures. Restarting these complex facilities requires between 10 to 15 days to stabilize operations, provided that secure export channels are available and storage tanks filled with oil await clearance through the Strait of Hormuz.
The Strait of Hormuz: A Crucial Barrier
The closure of the Strait of Hormuz poses the most significant barrier to the recovery of the sector, with around 60 empty supertankers lined up off the coast of Oman and the Arabian Sea awaiting passage. Although the vessels are ready, reorganizing traffic through this vital waterway will necessitate meticulous security coordination and protected convoys, leading to prolonged logistical pressures on the flow of energy, food, and raw materials even after hostilities cease.