Persian Gulf energy attacks disrupt supplies, raising risks of higher fuel and power prices

Escalating strikes on oil and gas facilities in the Persian Gulf, including Iran’s retaliation after an Israeli attack on a natural gas field, are disrupting flows through the Strait of Hormuz. With tanker traffic constrained and restarts complex, markets face longer supply tightness and wider price pressures on fuel, electricity, and goods, especially in Asia.

Fresh attacks on major oil and gas sites around the Persian Gulf are increasing the chance of longer lasting price rises. Costs may climb for petrol, power, food, and computer chips. Iran struck key Gulf energy infrastructure on Thursday. Iran said the move answered an Israeli strike on a natural gas field.

The exchange of strikes is also deepening worries over early war-related price jumps. Gulf producers have already reduced output at some oil wells. The risk of Iranian strikes has blocked most tanker movement through the Strait of Hormuz. With exports stuck, oil has had fewer places to go, adding strain to markets.

Strait of Hormuz oil and gas disruption hits Asia

Even if the Strait of Hormuz reopens soon, flows may not return quickly. Restarting refineries and related plants is complex and slow. Any damage from the attacks could extend delays further. Asia faces the sharpest impact because most oil and gas leaving the strait goes there, and shortages quickly feed into prices.

Governments in parts of Asia are already taking energy-saving steps. Offices in the Philippines are operating four days a week. Authorities there also issued directives to reduce air conditioning use. Vietnam has urged people to work from home. These measures reflect pressure from higher import costs and supply risk.

Oil and gas infrastructure targeted across the Gulf

Iran’s South Pars gas field is central to domestic energy supply. It is the world’s largest natural gas field and is shared with Qatar. Qatar’s section is called the North Field. South Pars provides most gas used in Iran for home heating and electricity generation, and any disruption would worsen daily life.

An Israeli strike hit facilities linked to South Pars at Asuleyah. That attack led to Iranian threats against energy sites in other Gulf states. Iran already faces periods of weak power production. Reduced gas from South Pars would add to shortages. US President Donald Trump addressed the risk of wider attacks.

US President Donald Trump said that Israel would not attack South Pars again, but warned on social media that if Iran continued striking Qatars energy infrastructure, the US would retaliate and massively blow up the entirety of the field.

In Qatar, the Ras Laffan liquefied natural gas terminal took heavy damage in Iran’s Thursday attack. The site had already been shut by state-owned QatarEnergy after a drone strike. Ras Laffan processes gas from the North Field. It chills gas into liquid, then loads tankers, mainly for Asian buyers.

The strike on Ras Laffan has rattled energy markets worldwide. Qatar accounts for 20 per cent of global liquefied natural gas supply. Europe is already facing higher prices. With shipments disrupted, traders fear longer instability in LNG supply routes. Any extended outage could tighten global availability across several regions.

Strait of Hormuz oil and gas routes and export workarounds

Iran’s Kharg Island remains a crucial crude export point. It handled almost all of Iran’s roughly 1.6 million barrels per day of prewar exports, most destined for China. Trump said the U.S. bombed military sites there on March 13 but spared oil infrastructure. Trump also warned that oil facilities could be next.

Some tankers have still loaded at Kharg Island. Shipping intelligence firms say some Iranian oil may be moving via a "dark fleet\". These vessels can use false location signals and unclear ownership to avoid sanctions. Such shipping adds uncertainty for insurers and traders. It also complicates efforts to track regional supply.

Saudi Arabia has relied on the East-West pipeline to keep exports moving. Saudi Aramco runs the line from the Abqaiq processing centre near the Gulf to Yanbu on the Red Sea. The route avoids the Hormuz chokepoint. Yet the pipeline cannot fully replace lost Hormuz capacity, limiting overall export options.

Saudi Arabia said the SAMREF refinery at Yanbu was hit. The report raised concerns about exports through the port. Damage or a slow restart could restrict shipments further. Refinery and terminal operations often need careful safety checks. Any pause can reduce supply even if upstream oil wells are still capable of pumping.

In the United Arab Emirates, the Fujairah oil terminal provides another bypass route. It sits on the Gulf of Oman and supports exports via a pipeline from the Habshan oil and gas field. This avoids sending oil through the Strait of Hormuz. Two strikes disrupted Fujairah, though operations have reportedly restarted.

Oil and gas refineries and supply chains, including India effects

Kuwait’s Mina al-Ahmadi and Mina Abdullah refineries were affected by a drone attack. The Kuwait Petroleum company said fires were extinguished on Thursday. It did not detail damage levels. Refineries are vital because they provide an outlet for crude. Without them, wells may need shutting due to a lack of storage and handling.

Restarting refineries takes time and involves strict safety steps. If Kuwait’s facilities remain down, many wells could stay largely inactive until processing is restored. This can tighten regional supply. It also adds pressure on importers. The knock-on effect can reach transport fuels, electricity generation, and industrial feedstocks used in manufacturing.

Oman’s Port of Salalah hosts an USD 800 million gas products facility. It produces liquid petroleum gas for export to Asia, where it is widely used for cooking. Although Salalah lies outside the Strait of Hormuz, operations were suspended as a precaution after drone strikes. Disruptions can still affect regional product availability.

In India, restaurants have begun adjusting to the cost squeeze. Some outlets have shortened operating hours. Many have also removed energy intensive items like curries and deep-fried foods. These changes reflect rising fuel and power costs linked to Gulf supply issues. Businesses dependent on steady energy prices are reacting quickly.

Energy risks extend beyond crude oil and LNG. Supplies of key inputs are also being obstructed. Helium, used in making computer chips, could tighten. Sulfur, used for fertiliser and chemical production, also faces risk. Shortfalls can lift prices across supply chains. Consumers may see effects in food and electronics costs.

Abu Dhabi’s Shah gas field is another site facing disruption. It supplies about 20 per cent of Abu Dhabi’s natural gas. It is also a major source of sulfur extracted from gas. That sulfur supports fertiliser and chemical manufacturing. Operations were suspended Tuesday after a drone strike, adding to concerns about wider shortages.

With multiple facilities under threat, markets are bracing for continued volatility in energy and materials. Reduced tanker traffic, damaged terminals, and slow refinery restarts can keep supplies tight. Asia remains most exposed, while Europe is also seeing higher LNG prices. The broader impact is spreading to industry and daily life, including in India.

With inputs from PTI