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- We began to count the wounds: what did the global fuel and energy sector lose in the Iranian war
We began to count the wounds: what did the global fuel and energy sector lose in the Iranian war
The unstable ceasefire in the Persian Gulf naturally led to a correction in oil and gas quotations — the stock exchanges reacted to the unblocking of the Strait of Hormuz by dropping the premium for geopolitical risk. However, the end of the active phase of hostilities does not mean a return to pre-war supply volumes. The production infrastructure of the world's largest oil and gas region has been severely affected by the war. Which enterprises, fields, pipelines, and ports have been shut down for several months, and which for several years, and what this means for the global energy market — in the Izvestia article.
Blows to the most painful
Pretty quickly after the start of the war, the parties targeted critical export infrastructure on both shores of the Persian Gulf, as a result of which the main difficulty in restoring the energy balance lies in the specifics of modern oil and gas equipment. The return of production and export capacities to service requires the replacement of high-tech components. Cryogenic heat exchangers, gas turbine compressors, distillation columns, and high-capacity pumping systems are custom-made by a limited number of engineering corporations in the United States, Europe, and Japan.
The standard production cycle for such equipment ranges from 18 to 24 months. It is physically impossible to order, manufacture, deliver and assemble these units faster. A significant part of the region's mining and processing capacities has been withdrawn from global circulation for at least one to two years, regardless of the success of diplomatic negotiations.
The damage to the Ras Laffan industrial complex in Qatar was the most sensitive blow to the global gas market. The destruction of several technological lines for gas liquefaction means the withdrawal from the market of 15% of the world's LNG capacity. Given the critical dependence of the European Union and East Asian countries on Qatari supplies, this guarantees a long period of high prices at spot hubs. The shortage of physical volumes of gas cannot be quickly covered by American or Australian projects.
In the oil segment, the damage affected the stabilization and export capabilities of key OPEC players. The strikes on the largest Abqaiq primary oil treatment center and the Ras Tanura terminal in Saudi Arabia have reduced the kingdom's effective capacity by 2-3 million barrels per day. The restoration work here will take from 8 to 12 months.
At the same time, alternative routes designed to bypass the Strait of Hormuz were affected. The destruction of a significant part of the tank farm and distribution systems at the Fujairah terminal in the UAE, as well as damage to pumping stations of the Saudi East–West main pipeline, significantly limit the ability of exporters to redirect flows.
Iran occupies a special place in world exports. The military campaign has caused systemic damage to the country's infrastructure. The gas processing plants in Assalouyeh, which provided production at the phases of the South Pars field, suffered damage of an unclear scale. Given the current sanctions regime, Iran is deprived of access to Western technologies, which makes it impossible to quickly restore these nodes. However, preliminary data show that exports from Iran even increased during March, so it remains to assess the damage to the infrastructure of supplies abroad from the country.
Further without reserves
The cumulative effect of these infrastructure losses is roughly understandable: the global energy market has lost its main stabilizing mechanism — reserve capacity.
Historically, Saudi Arabia and its neighbors have maintained an artificial reserve of production to smooth out supply and demand imbalances. Today, this buffer has been damaged for at least several months, and given that millions of barrels of reserves will be "consumed" during this time, the effect may be much more long-term. That is, for example, any seasonal increase in consumption or a local incident in another region (hurricane season in the Gulf of Mexico, technical failures in the North Sea or logistical problems in Africa) will provoke disproportionate price jumps, since there is now nothing to compensate for the dropped barrels.
For the global economy, this means a long period of high energy costs. Unblocking the shipping lanes solved the shipping problem, but the fundamental problem of production limits remained.
Marcel Salikhov, president of the Institute of Energy and Finance, told Izvestia that there was not as much confirmed damage as it could have been, but it was concentrated in the most sensitive sites, primarily for LNG.
— The most clearly confirmed case, which goes far beyond the "few months", is Qatar. QatarEnergy reported that two of the 14 LNG lines and one GTL facility were damaged. The repair will disable 12.8 million tons of LNG capacity (~17% of Qatar's exports) for 3-5 years. It was also reported that production in Ras Laffan began to be partially restored in April 2026, but a full return depends not only on repairs, but also on the patency of Hormuz," he explained.
The picture for the rest of the Persian Gulf countries is still different, the expert added. There is damage, but the scale of the long-term loss of power has not yet been confirmed to the same extent as in Qatar.
— The long-term damage from the war is not so much in the destruction of capacities as in the change in the risk structure in the energy markets. Even if the truce remains in place, Hormuz remains a strategic risk. This will lead to an increase in freight rates and a redistribution of flows, as well as an increase in the cost of capital for the Gulf countries. Consumers will invest in additional stocks. It seems that this effect will be much more serious and larger than the destruction of the infrastructure that has occurred," stated Salikhov.
In any case, the key consequences for the global economy of equipment failure and the blocking of trade routes are more or less clear. The high cost of raw materials will continue to put pressure on the profitability of the industrial sector in Europe and Asia, slowing global GDP growth. And the Persian Gulf energy sector will need tens of billions of dollars of investment and several years of continuous operation just to return to operational performance in early 2026.
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