Iran’s IRGC hits Gulf energy hubs after Israel’s attack on South Pars, torching Qatar’s LNG lifeline, disrupting crypto markets and dragging the global economy into recession.
Summary
- Iran’s IRGC attacks Qatar’s Ras Laffan LNG hub and refineries in Kuwait, Saudi Arabia and the United Arab Emirates, forcing major production shutdowns and stoking supply fears.
- Brent crude surpasses $110 and European gas rises more than 25% as markets price lasting damage to the Gulf’s energy capacity and the growing risk of global recession.
- Trump goes from threatening to “blow up” South Pars to urging a reduction in tensions as energy infrastructure across the Persian Gulf becomes the main war target.
The war in the Middle East escalated sharply on Thursday as Iran’s Islamic Revolutionary Guard Corps (IRGC) launched waves of retaliatory attacks on energy facilities across the Persian Gulf, setting fire to Qatar’s liquefied natural gas terminals and targeting oil refineries in Kuwait, Saudi Arabia and the United Arab Emirates, sending global energy prices soaring and pushing the region to the brink of a broader economic catastrophe.
The strikes came in direct retaliation for Israeli airstrikes on Iran’s South Pars gas field, the world’s largest natural gas complex, run jointly with Qatar, which Israel attacked with US support on Wednesday. The South Pars attack marked a qualitative shift in the conflict, now in its third week, as both sides explicitly began attacking each other’s critical energy infrastructure for the first time.
The consequences were immediate and global. Brent crude rose above $110 per barrel during trading on Thursday (an increase of more than 50% since the war began on February 28, when it was trading near $70), briefly touching $116 before partially retreating. European natural gas benchmark TTF prices increased by between 28% and 30%, having already doubled over the last month.
The most strategically important attack hit Qatar’s Ras Laffan terminal, the world’s main LNG export hub, which normally supplies about 20% of global LNG consumption. Qatari authorities confirmed that the attack caused “extensive damage,” forcing QatarEnergy to suspend production, a decision that, if sustained for more than two months, would, according to energy analysis firm Wood Mackenzie, “fundamentally change the outlook for the global gas market.” Global LNG supply has already contracted by almost 20% since QatarEnergy halted operations earlier this month.
Iran also attacked Kuwait’s Mina Al-Ahmadi refinery, one of the largest in the Middle East, with a drone, and the Kuwait Petroleum Corporation confirmed a “limited” fire at the facility. A drone hit a Saudi Aramco refinery in Yanbu, a joint venture with ExxonMobil on the Red Sea, and the damage is still being assessed. In a new escalation, Iran has completely suspended gas exports to Iraq, raising fears of a cascading regional energy crisis.
Tehran issued explicit threats to attack additional facilities in the Gulf, naming Saudi Arabia’s Jubail Petrochemical Complex, the United Arab Emirates’ Al Hosn Gas Field and Qatar’s Mesaieed complex as “direct and legitimate targets.” The IRGC warned civilians in neighboring Gulf states to evacuate areas near oil and gas facilities.
JPMorgan responded by cutting its year-end target for the S&P 500 from 7,500 to 7,200 points, warning that oil prices rising more than 30% historically precede demand contractions and recession. Global stock markets fell, and European stocks fell as energy costs rose.
US President Trump, who had threatened to “massively blow up” South Pars if Iranian attacks on Qatar continued, changed his tune on Thursday and called for a reduction in attacks on energy facilities. The war, which shows no signs of abating, has now placed the energy infrastructure of the Persian Gulf (which supplies a substantial portion of the world’s oil and gas) squarely in its crosshairs. crosshair.
Crypto markets crashed along with energy spikewith Bitcoin falling back below $70,000 after trading above $73,000 earlier on the week, while Ethereum fell towards the low $2,200s and the value of the broader crypto market retreated from the roughly $2.5 trillion area as traders unlocked leverage and rotated into cash and short-duration TradFi safe havens.
