Why Iran is attacking Gulf energy infrastructure
On March 18, 2026, Iran launched a major wave of missile and drone strikes against Gulf energy infrastructure in retaliation for an Israeli strike that targeted Iran's Asaluyeh complex — home to facilities treating gas from the offshore South Pars field (shared with Qatar).
Iranian strikes caused "extensive damage" to Ras Laffan in Qatar — the world's largest LNG hub, supplying approximately 20% of global natural gas — damaging two of Qatar's 14 LNG trains and one gas-to-liquids facility, with 12.8 million tonnes of annual LNG capacity sidelined for 3–5 years.
Saudi Arabian refineries on the Red Sea and two Kuwaiti oil refineries were also targeted and set ablaze.
Iran has effectively partially blocked the Strait of Hormuz, attacking tankers in the passage and permitting only a select group of nationalities' ships to transit.
Brent crude prices rose sharply — from approximately $68/barrel on February 27 to nearly $100–$119/barrel range by mid-March 2026.
Iran's strategic goals extend beyond military objectives: the attacks aim to damage Gulf states' economies, pressure US allies, and drive up global energy prices.
Goldman Sachs estimates Qatar and Kuwait could see GDP drops of approximately 14% if the conflict continues through April.
South Pars / North Dome Gas Field — The World's Largest Gas Reserve
The South Pars / North Dome field is the world's largest natural gas field, straddling the maritime boundary between Iran and Qatar in the Persian Gulf. Iran's portion is called South Pars; Qatar's portion is called North Field (or North Dome). The field contains an estimated 51 trillion cubic metres of natural gas — about 8% of the world's total proven reserves. Control and development of this field has been central to both Iran's and Qatar's energy strategies for decades.
Key Details
- South Pars / North Dome: ~51 trillion cubic metres of gas reserves — the largest single gas field on Earth.
- Iran's South Pars is processed at the Asaluyeh complex — the exact target of the Israeli strike that triggered the current Iranian retaliatory wave.
- Qatar's North Field feeds the Ras Laffan LNG complex — the world's single largest LNG export facility.
- Ras Laffan supplies approximately 20% of the world's LNG; damage to its infrastructure affects energy markets from Europe to Asia.
- Two of Qatar's 14 LNG trains were damaged, with repairs expected to take 3–5 years.
- Qatar's hydrocarbon earnings represented 83% of total government revenues in 2023 — making energy infrastructure attacks economically devastating.
By striking Iran's South Pars processing facilities, Israel triggered a proportional retaliation against Qatar's North Field infrastructure — establishing a direct link between the two sides of the world's largest gas field and drawing the Gulf states into the conflict.
Iran's Strait of Hormuz Strategy — Coercion Through Chokepoint Control
The Strait of Hormuz has been Iran's primary coercive instrument in its periodic confrontations with the West and Gulf states for decades. Iran's ability to threaten — or partially implement — closures of this strait gives it asymmetric leverage: it can impose enormous economic costs on adversaries (and the global economy) without requiring conventional military superiority. This strategic posture is documented in Iranian military doctrine as a deterrence and retaliation tool.
Key Details
- The Strait of Hormuz is ~33 km wide at its narrowest; two 3.2 km shipping lanes handle approximately 20 million barrels/day (20% of global petroleum liquids) and 20% of global LNG trade.
- Iran's IRGC Navy (Islamic Revolutionary Guard Corps Navy) specializes in swarm boat tactics, mining, and anti-ship missiles — all designed for strait denial operations.
- Past threats: Iran threatened closure during the Tanker War (1984–1988), during nuclear standoffs (2011–2012), and again in 2019 after US sanctions.
- Current crisis: Iran has attacked tankers and allowed only select nationalities to transit — a partial blockade rather than a full closure.
- War-risk insurance premiums for Gulf tankers surged over 1,000%; some insurers withdrew cover entirely.
- Alternative route (Cape of Good Hope): adds 10–15 days to voyage times; insufficient tanker availability to reroute all Hormuz traffic.
Iran's current attacks represent a deliberate activation of its Hormuz strategy as a coercive tool — targeting not just military assets but the economic lifelines of Gulf states and their Western allies.
Geopolitical Economy of Gulf Energy — Why Iran Targets Its Neighbours
The Gulf Arab states — Saudi Arabia, Qatar, UAE, Kuwait — are both Iran's geographical neighbours and strategic adversaries. They host US military bases, are aligned with the US-Israel security axis, and benefit from oil/gas revenues that fund their own military modernisation. By attacking their energy infrastructure, Iran pursues several objectives simultaneously: it weakens their ability to finance opposition to Iran, reduces the economic cushion that allows them to absorb Western support for Israel, and signals regional power to domestic and international audiences.
Key Details
- Goldman Sachs projected GDP drops of ~14% for Qatar and Kuwait if the conflict continues through April 2026.
- Capital Economics projected a 10–15% regional GDP decline with lasting infrastructure damage.
- Qatar expelled Iran's security and military attachés as persona non grata following the Ras Laffan strikes.
- Saudi Arabian refineries on the Red Sea were targeted — Saudi oil exports pass through both the strait and Red Sea routes.
- Global ripple effects: Philippines cut electricity 10–20%; Vietnam mandated work-from-home; UK announced £53 million heating assistance.
- US gasoline prices hit $3.60/gallon — highest since Russia's 2022 Ukraine invasion — creating domestic political pressure on the Trump administration.
Iran's infrastructure targeting is not opportunistic — it is a calculated strategy to impose maximum economic pain on adversaries who directly or indirectly support the US-Israel military campaign.
- South Pars / North Dome: world's largest gas field, ~51 trillion cubic metres, shared between Iran and Qatar.
- Ras Laffan (Qatar): world's largest LNG hub; supplies ~20% of global LNG.
- Damage: 2 of 14 LNG trains + 1 gas-to-liquids facility; 12.8 million tonnes/year sidelined for 3–5 years.
- Brent crude: from ~$68/barrel (February 27) to ~$100–$119/barrel range (March 2026).
- Strait of Hormuz: ~20 million barrels/day, ~20% of global petroleum; ~33 km wide at narrowest.
- War-risk insurance premiums: surged over 1,000%; some insurers withdrew coverage.
- Goldman Sachs: Qatar and Kuwait GDP could drop ~14% if conflict continues through April.
- US gasoline: $3.60/gallon — highest since Russia's Ukraine invasion.
- India (crude basket): US$113.57/barrel as of March 11, 2026.
- Qatar's hydrocarbon revenues: 83% of total government revenues in 2023.