The conflict between the US/Israel and Iran has entered its third week, escalating from military targets to the core of the global energy supply chain. Iran's retaliatory strikes for Israel's bombing of the South Pars gas field directly targeted Qatar's Ras Laffan Industrial City—a facility that processes approximately one-fifth of the world's liquefied natural gas (LNG). The damage from the attack is estimated to require three to five years for full repair. An Iranian military spokesperson warned that further attacks on US and allied energy infrastructure would continue unabated if Iranian energy facilities are attacked again. This round of strikes marks a "new phase of the war," with energy assets becoming primary retaliatory targets, highlighting Iran's retained capacity for countermeasures.
The Iranian attacks targeted not only Qatar but also a major Saudi Red Sea port (used to bypass potential blockades of the Strait of Hormuz), the UAE's Habshan gas facility, two Kuwaiti refineries (triggering fires), and oil facilities at Israel's Haifa port. The CEO of QatarEnergy disclosed that the attack has incapacitated one-sixth of Qatar's LNG export capacity, with an estimated annual revenue loss of $20 billion. Following the attack on the shared South Pars gas field, Qatar's natural gas production has been severely impacted, posing a long-term constriction on global LNG supplies. These events have exposed limitations in the Gulf region's air defense systems regarding the protection of strategic energy assets.
US President Trump, during a meeting with the Japanese Prime Minister, publicly stated that he had warned Israeli Prime Minister Netanyahu against targeting energy infrastructure again, asserting that the US had no prior knowledge of Israel's strike on the South Pars field. This highlights a divergence in US-Israel strategic coordination. Trump explicitly ruled out deploying additional ground troops to the Middle East, despite reports that his administration was considering sending thousands more personnel. Netanyahu confirmed receiving the request to halt attacks on energy facilities and claimed that 20 days of airstrikes had significantly degraded Iran's uranium enrichment and ballistic missile capabilities, though ground operations remain a future possibility.
The UK, Canada, France, Germany, Italy, the Netherlands, and Japan issued a joint statement pledging to "make appropriate contributions to ensure safe navigation through the Strait of Hormuz" and to cooperate with oil-producing nations to increase output. However, the statement lacked specific action details. The German Chancellor reiterated that participation would only occur after hostilities cease. Allies generally express skepticism about the conflict, citing unclear objectives, difficulty in control, and a reluctance to be drawn in. Trump criticized some allies for their cautious response to calls for securing the strait, noting that rising oil prices threaten his core voter support.
Oil prices experienced significant volatility, with prices surging approximately 10% intraday on Thursday. Brent crude briefly touched $119.11 per barrel, nearing a three-and-a-half-year high, before fluctuating on news of potential eased sanctions on Russian oil. US crude settled at $94.59, with its discount to Brent reaching the widest in 11 years, reflecting heightened supply disruption fears. On Friday, US crude prices trended lower, trading around $92.80 per barrel, down about 2.8% on the day. Risks of a global energy crisis are rising, compounded by inflationary pressures and concerns over slowing economic growth.
The conflict in the Middle East has evolved into an energy war. Iran's retaliatory strikes on Qatar's LNG facilities and energy assets in multiple countries have directly severely impacted the stability of global natural gas and oil supplies. Repair periods lasting several years will amplify long-term price pressures. Trump's public warning to Israel to avoid energy targets and his refusal to deploy more troops indicate a US attempt to control escalation risks. However, cracks in US-Israel coordination and cautious allies complicate diplomatic efforts. Sharp fluctuations in oil and gas prices are already feeding into inflation expectations, threatening the global economy with a potential repeat of an "oil shock." If navigation through the Strait of Hormuz is obstructed or more facilities are attacked, the energy crisis could shift from a short-term disruption to a structural supply shortage, testing the response capabilities of central banks and governments worldwide.
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