Persian Gulf faces energy crisis amid war

  • Author: Inspenet TV.

  • Publish date: 25 April 2026

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Amid the escalating war in the Middle East, the Persian Gulf is facing significant deterioration in its energy infrastructure. Initial estimates place repair costs at at least $25 billion, a figure that could rise as additional damage is assessed.

In addition, disruptions at processing plants, refineries, and terminals have reduced the region’s operational capacity. This situation is already being reflected in international markets, putting upward pressure on oil prices.

Qatar and Iran bear the greatest damage

On one hand, Qatar stands out as one of the most affected countries. In the Ras Laffan industrial area, the destruction of several LNG plants has led to a nearly 17% drop in production capacity. This reduction represents millions of tons per year removed from the global market.

Similarly, Iran faces a different scenario, sanctions limit its access to Western technology and suppliers, forcing reliance on local and Asian partners. This factor could extend recovery timelines and increase operating costs.

Bahrain and the impact on recent investments

Meanwhile, Bahrain is dealing with a direct blow to its infrastructure following attacks on the BAPCO refinery. The affected facilities included recently modernized units, delaying the recovery of investments made in recent years.

In this context, repairs involve not only physical reconstruction but also the management of contracts, insurance, and additional costs stemming from the conflict.

Industrial limitations slow recovery

However, capital is not the only obstacle. The availability of critical equipment, such as large gas turbines, represents a significant bottleneck. Currently, major manufacturers face delays of two to four years due to high global demand.

This situation complicates the restart of LNG plants and other facilities essential to energy supply.

Local capacity makes the difference

At the same time, recovery speed varies depending on the strength of each country’s industrial ecosystem. In Saudi Arabia, for example, the presence of technical teams allowed operations at some facilities to resume more quickly.

In contrast, countries with less local capacity face slower and more costly recovery processes.

Global impact on oil prices

Finally, the impact of the conflict extends beyond the region. Each day of disruption in the Persian Gulf reduces available supply in international markets, increasing volatility and pushing oil prices higher.

As repair work progresses, operators are prioritizing the restoration of existing production over new developments. This decision could influence the global energy balance in the coming years.

Chart of repair costs for infrastructure in the Persian Gulf after oil and gas damage estimated at 25 billion USD.
Cost estimate for repairing damaged energy infrastructure in the Gulf, with a heavy emphasis on engineering and construction. Source: Rystad Energy.

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