Energy infrastructure across the Persian Gulf has suffered severe damage amid more than three weeks of conflict involving Iran, plunging oil fields, refineries, and liquefied natural gas (LNG) export terminals into disarray. Experts warn that full restoration of production capacity could take up to five years. The Strait of Hormuz is effectively blockaded, delivering the most severe shock to global energy supply chains since the 1970s oil crises.
Qatar’s Ras Laffan Industrial City—the world’s largest LNG export hub—saw its export capacity drop abruptly by 17% following a missile strike last week. A senior executive at QatarEnergy disclosed that the attack is expected to result in approximately $20 billion in lost annual revenue, with repairs to damaged facilities projected to take three to five years. Due to extensive damage to critical equipment, the company is preparing to declare force majeure on certain long-term supply contracts, affecting major buyers including China, South Korea, Italy, and Belgium. When accounting for both reconstruction costs and lost income, total economic losses could exceed $100 billion.
The International Energy Agency (IEA) confirmed that over 40 energy assets across nine Middle Eastern countries have sustained “serious or very serious” damage, impacting not only crude oil and natural gas production but also supply chains for key industrial inputs such as petrochemicals, fertilizers, sulfur, and helium. IEA Executive Director Fatih Birol stated that the current disruption is equivalent in scale to the combined impact of the two 1970s oil shocks and the 2022 Russia-Ukraine gas crisis, with Asia—the largest importer of Middle Eastern energy—bearing the brunt of the fallout.
Recovery timelines for oil fields vary depending on size and the extent of shutdowns. Saudi Aramco claims its affected facilities could resume output within days, but industry experts note that smaller fields typically require two to three weeks to restart, while larger complexes may need four to five weeks. Reservoir engineers caution that rushing the restart process could cause system failures, as entire pipeline networks have been depressurized during the outage and must be gradually repressurized. Moreover, prolonged well shutdowns increase risks of pipeline corrosion and wax deposition, further delaying recovery. Several international oil companies have already evacuated expatriate staff, and their return hinges on stabilization of the security situation.
Refineries are under similar strain. Major facilities in the UAE’s Ruwais, Kuwait’s Mina Al-Ahmadi, and Bahrain have been forced to curtail operations or shut down entirely due to attacks. Analysts point out that even if a large refinery complex suffers no structural damage, restarting and stabilizing full operations after a complete shutdown typically takes 10 to 15 days. In contrast, plants that maintained minimal operations can resume normal output more quickly.
Logistical bottlenecks remain concentrated at the Strait of Hormuz. Although dozens of Very Large Crude Carriers (VLCCs) have rerouted to Yanbu Port on the Red Sea, around 60 empty tankers remain anchored off the Gulf of Oman awaiting instructions. Shipping experts estimate that once passage through the strait resumes, these vessels could reach loading ports within three to four days. However, upstream production cannot meaningfully restart until onshore storage tanks are emptied—a clear signal that restoring maritime access is the critical first step toward reviving the region’s entire energy system.
