Gulf energy companies move to keep oil and gas flowing amid Iran attacks

The Gulf’s national energy companies are scrambling to keep critical oil and gas supplies flowing amid Iranian attacks on their refineries and the closure of the Strait of Hormuz. Saudi Aramco and other major exporters are working to ramp up alternative routes and taking measures to ensure plants can rapidly return to full production.

More than 40 energy assets across the Middle East have now been “severely or very severely” damaged in the escalating Iran war, according to the International Energy Agency, including extensive damage at Qatar’s Ras Laffan Industrial City, which houses the world’s biggest LNG export plant.

The attacks had knocked out 17% of Qatar’s LNG export capacity, causing about $20 billion in lost annual revenue, for three to five years, QatarEnergy CEO Saad al-Kaabi, who is also Qatar’s Energy Minister, told Reuters in an interview. 

The disruption is equivalent to the two major oil crises in the 1970s and the 2022 natural gas crisis triggered by Russia’s invasion of Ukraine “all put together,” IEA Executive Director Fatih Birol said at Australia’s National Press Club in Canberra today. Global LNG exports have declined to a six-month low.

Adnoc Gas has resumed operations at Habshan, the UAE’s largest gas processing facility, after it was forced to halt operations following an attack last week, Bloomberg reports. Its LNG plant at Das Island is operating at very low levels because of the export bottleneck, but has continued producing to allow for a quick return to higher capacity.

Saudi Aramco is ramping up flows through its 1,200-kilometer East-West pipeline, rerouting some oil exports from the kingdom’s oil fields in the east of the country to the port of Yanbu on the Red Sea, where more oil tankers are arriving daily and exports have passed 3.6 million barrels a day. 

Aramco CEO Nasser Amin withdrew from CERAweek, the major energy conference kicking off in Houston today, as he prioritizes dealing with the crisis. Nasser earlier this month warned of the “catastrophic” impact on global oil markets if the Iran war continues.