Three weeks into the war between Iran, Israel, and the U.S., the fighting in the Middle East continues unabated in many parts of the region.
Within the last couple of days, airstrikes have killed Ali Larijani, the secretary of Iran’s Supreme National Security Council, Gholamreza Soleimani, the commander of Iran’s paramilitary Basij forces, and Esmaeil Khatib, Iran’s intelligence minister.
In response, Iranian forces launched another wave of missiles and drones on targets in Israel, Saudi Arabia, Kuwait, Iraq and the United Arab Emirates, killing at least two people in Israel. Iran has also threatened to step up attacks on oil and gas facilities across the Gulf region after Israeli forces struck the South Pars field, the country’s biggest natural gas field, on March 18. According to some estimates, the Gulf countries had already faced more than 2,000 drone and missile strikes from Iran by mid-March, targeting residential areas, military bases, ports, airports and energy-related infrastructure.
Meanwhile, U.S. President Donald Trump has called on NATO member states and other U.S. allies to send naval support to reopen the Strait of Hormuz, with limited success so far. Leaders of Germany, France, Poland, Greece, and Norway have all made public statements in recent days saying that their countries will not get involved militarily in the Middle East.
Similarly, Canada’s Foreign Minister Anita Anand has ruled out joining offensive military operations against Iran but left the door open to supporting a coordinated effort to free up shipping traffic through the Strait of Hormuz if its allies can agree on a joint way forward. While Iraq is reportedly in talks with Iran to allow its vessels to transit through the Strait of Hormuz, the waterway is likely to remain closed for the majority of ships for the foreseeable future.
Both sides step up attacks on regional oil and gas facilities
In recent days, both sides have stepped up targeted strikes on oil and gas facilities in the Middle East. On March 17, Iranian missiles and drones struck oil and gas production facilities in two neighboring countries. The attacks targeted the Shah Natural Gas Field in the United Arab Emirates, one of the world’s biggest natural gas fields, as well as the Majnoon Oil Field in Iraq. The Shah Natural Gas Field produces around 5% of global granulated sulphur as well as 20% of the United Arab Emirates’ natural gas supply. Strikes also hit facilities at the Port of Fujairah in the United Arab Emirates, a major oil export hub, which has been targeted repeatedly in the last three weeks.
A day later, Israeli strikes targeted facilities of the South Pars Gas Field, which makes up about a third of the world’s largest natural gas reserve and accounts for around 70-75% of Iran’s total gas production. The strikes were the first ones targeting the country’s oil and gas production capabilities since the start of the conflict.
In response to these attacks, Iran announced that five major energy-related facilities in the Middle East have become legitimate military targets and called on residents and employees to evacuate the affected areas. According to Iran’s Revolutionary Guard Corps, the Samref Refinery and Jubail Petrochemical Complex in Saudi Arabia, the Al Hosn Gas Field in the United Arab Emirates, as well as the Mesaieed Petrochemical Complex and the Ras Laffan Refinery in Qatar have all been declared potential targets.
Saudi Arabian Oil Company (Saudi Aramco) and QatarEnergy reportedly initiated evacuations at the Samref Refinery, the Jubail Petrochemical Complex and the Ras Laffan liquefied natural gas (LNG) facilities as a precautionary measure following the threat.
Iranian missile strikes have since hit several LNG facilities within the Ras Laffan Industrial City, causing fires and extensive damages, according to QatarEnergy. Ras Laffan Industrial City houses the world’s largest LNG export facility, which handled around a fifth of total global supply before domestic production had to be shut down early on in the conflict. An attack on the complex on March 17 reportedly also damaged a gas-to-liquids plant run by United Kingdom-based oil and gas company Shell plc.
Another Iranian strike targeted the Samref Refinery in Saudi Arabia on March 18, but no major damages have been reported at the time of writing. U.S. President Trump has since threatened that U.S. forces would attack and destroy Iran’s South Pars Gas Field if Iran continues striking LNG infrastructure in Qatar. U.S. strikes on oil facilities on Kharg Island, Iran’s main oil export hub, are also said to remain an option.
Following the attacks on oil and gas production facilities in the Middle East, the international benchmark for brent crude briefly rose beyond $119 (€104) before settling at around $113 (€98) per barrel on March 19. The Dutch TTF Natural Gas Future Price, the benchmark for natural gas prices in Europe, jumped to almost €70 ($80) per megawatt hour on the same day, more than double the pre-war level in response to the crisis in the Middle East.
While a growing number of oil and gas facilities in the Middle East are targeted by drone and missile strikes, the transport of oil, gas and other commodities through the Strait of Hormuz remains largely halted. In recent days, only a handful of tankers and cargo vessels have been allowed to transit the waterway, with most of the tankers allowed to transit so far believed to be heading to China. More than a thousand ships are estimated to remain stuck in the Persian Gulf because of the conflict.
Fuel shortages worsen in parts of Asia as energy supply from the Middle East remains cut off
Fuel shortages continue to worsen in many parts of Asia, with several governments announcing emergency measures to curb the impact of the energy supply disruptions.
Taiwan, which used to receive around a third of its LNG supply from Qatar, confirmed that it has secured alternative natural gas supply for the coming months. According to a government statement, new international supply contracts have been signed and imports of natural gas from the U.S. are expected to increase from June.
South Korea is planning to increase coal and nuclear power generation to stabilize the energy market. The government announced at the beginning of the week that it will lift limits on coal-fired power generation and increase the utilization of the country’s nuclear power plants to around 80%. Prior to the war, South Korea received around 20% of its LNG supply and 70% of its oil supply from countries in the Middle East.
Authorities in Sri Lanka have declared every Wednesday a public holiday for public institutions until further notice, while Bangladesh has introduced planned blackouts across the country to conserve energy.
Meanwhile, a member of the Vietnamese government confirmed earlier this week that his country had reached out to Japan and South Korea to increase access to crude oil supply, but it wasn’t immediately clear how both countries reacted to the request for support.
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