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Middle East Energy Disrupted as Israel-US-Iran Escalation Shuts Key Oil Facilities
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Oil and gas operations across the Middle East have been forced to close as military actions involving Israel, the United States, and Iran enter their third day.
Exchange of strikes has led to significant disruptions in energy production and exports throughout the region, according to The Moscow Times on March 2.
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In Saudi Arabia, the state-owned energy company Saudi Aramco halted operations at the Ras Tanura refinery following a drone strike. The Ras Tanura complex is a vital part of the global energy chain, housing one of the largest refineries in the Middle East with a capacity of 550,000 barrels per day. It also serves as a primary export terminal for Saudi oil.
Official state media in Saudi Arabia reported that the situation at Ras Tanura is currently under control. Two drones were intercepted near the facility, and while falling debris caused a small fire, no injuries were reported.
While domestic supplies remain unaffected, the temporary closure has increased concerns regarding global availability, especially as maritime traffic through the Strait of Hormuz has nearly stopped following recent attacks on vessels.
Energy companies in Iraqi Kurdistan have also taken preventive measures by stopping production at several fields. Firms such as DNO, Gulf Keystone Petroleum, Dana Gas, and HKN Energy suspended operations despite no reports of direct damage to their facilities.
The Israeli government has instructed Chevron to temporarily suspend production at the Leviathan gas field located off the Mediterranean coast. The facility was in the process of increasing its capacity to 21 billion cubic meters per year as part of a major $35 billion export agreement with Egypt.
Analysts suggest the targeting of Saudi infrastructure marks a change in the regional situation. “The attack on the Saudi Arabian Ras Tanura refinery is a significant escalation, and energy infrastructure facilities in the Gulf states are now directly in Iran's sights,” said Torbjorn Soltvedt of Verisk Maplecroft.
He added that “The attack is also likely to push Saudi Arabia and neighboring Gulf states closer to participating in US and Israeli military operations against Iran.”
The uncertainty surrounding these disruptions caused a sharp reaction in global markets. Brent crude futures rose by approximately 10% on Monday, with prices climbing above $82 per barrel as traders reacted to the potential for prolonged supply shortages.
Earlier, on the evening of February 28, Iranian-made Shahed drones struck a luxury hotel on Dubai’s Palm Jumeirah and a United States naval base in Bahrain.
A fire broke out at the Fairmont The Palm hotel following the impact, while separate strikes targeted facilities associated with Naval Support Activity Bahrain, the primary base for the US Navy’s Fifth Fleet.
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