Iran and Israel dragged the Gulf energy sector into the conflict’s most costly phase on Wednesday when Israeli strikes on the South Pars gasfield were followed by Iran’s sweeping threats against energy infrastructure across the region. The Revolutionary Guards named specific facilities in Saudi Arabia, the UAE, and Qatar and ordered immediate evacuation. Oil prices surged toward $110 a barrel as the cost of the escalation began to be felt across global markets.
South Pars, the world’s largest natural gas reserve, is shared between Iran and Qatar and has been the pillar of Iran’s gas economy throughout the conflict. The Israeli strikes — reportedly with US authorization — were the first direct attacks on Iranian fossil fuel production. Washington and Tel Aviv had previously avoided this step, mindful of the global economic consequences. Those consequences were now materializing with alarming speed.
Threatened facilities listed by Iran’s state media included Saudi Arabia’s Samref refinery and Jubail complex, the UAE’s al-Hosn gasfield, and Qatar’s Mesaieed and Ras Laffan facilities. All workers and residents were told to leave immediately. The Asaluyeh governor called the US-Israeli decision “political suicide” and declared Iran was now engaged in a full-scale economic war that would carry a heavy global cost.
Brent crude climbed nearly 5% to $108.60 per barrel, while European gas benchmarks surged more than 7.5%. Gulf oil exports had already fallen 60% from pre-war levels due to infrastructure damage and Iran’s Strait of Hormuz blockade. Iran had continued to export its own crude through the strait unimpeded while blocking Gulf neighbors’ shipments — a strategic weapon it had wielded throughout the conflict. The threat of Iranian strikes on Gulf energy facilities raised fears of a further and potentially catastrophic supply collapse.
Qatar’s government spokesperson Majid al-Ansari warned that targeting energy infrastructure threatened global energy security and millions of regional residents. The most costly phase of the conflict had arrived — not just in military terms, but in economic ones that would be felt by energy consumers, governments, and markets around the world. The coming hours would reveal the full extent of the cost that Iran and Israel had imposed on the global energy system.