Middle Eastern Oil and Gas Facilities Halt Production Amid Military Strikes

Attacks tied to the military conflict in Iran and the greater Middle East have led to temporary shutdowns, reduced output, and broader market volatility, significantly impacting energy companies with direct regional operations and global producers linked to Middle East supply. Companies such as Saudi Aramco, QatarEnergy, Chevron, Energean, and many Iraqi Kurdistan producers have completely halted operations at refineries, offshore platforms, and oil fields in the region.

In addition to these direct impacts on facilities and production, global multinational oil producers such as ExxonMobil, TotalEnergies, and Shell face heightened risk to their Middle East operations because the region accounts for a significant share of their upstream output, and disruptions to shipping routes like the Strait of Hormuz could further affect their supply chains.

• Saudi Aramco: The Ras Tanura refinery—one of the largest and operated by Saudi Arabia’s state-owned oil company—was shut down as a precaution after reported drone strikes on the facility and its export terminal complex.
• QatarEnergy: The state-owned Qatari energy company halted production at its LNG facilities in Ras Laffan and Mesaieed after attacks, disrupting approximately 20% of global LNG supply. It also stopped the production of downstream products, including urea, polymers, methanol, aluminum, and other products.
• Chevron: The U.S.-based oil major was ordered to temporarily shut down operations at the large-scale Leviathan gas field offshore Israel amid regional strikes and precautionary measures. The company had recently announced efforts to expand its capacity there.
• Energean: The energy company has ceased output from smaller Israeli gas fields it operates following the strikes.
• Iraqi Kurdistan Producers: Field operators including DNO, Gulf Keystone Petroleum, Dana Gas, and HKN Energy stopped production at oil fields in Iraqi Kurdistan as a precautionary response to regional instability, though no physical damage has yet been reported.

How will the conflict impact supply chains for oil and LNG?

Strikes on oil and gas facilities in the Middle East—particularly those affecting Saudi Arabia, Qatar, and Israeli offshore assets—could have significant ripple effects across the international gas supply chain, even if disruptions are temporary. Qatar is among the world’s top LNG exporters, so any sustained disruption at facilities like Ras Laffan would immediately tighten global LNG availability, especially in Asia and Europe, which rely heavily on Qatari cargoes.

Reduced LNG exports would likely increase spot LNG prices, increase competition among Asian and European buyers, and force utilities to draw down storage or seek alternative cargoes from the United States or Australia. Even short-term outages can create price spikes as LNG operates in a globally interconnected spot and contract market.

A broader escalation involving Iran raises concerns about shipping through the Strait of Hormuz, a chokepoint for roughly 20% of global oil and a significant share of LNG exports, including shipments from Qatar. If shipping lanes were disrupted, LNG cargo insurance rates would rise, freight rates would increase, delivery times to Europe and Asia could lengthen, and buyers might trigger force majeure clauses. This would affect not just Middle East producers but downstream import terminals, utilities, and industrial gas consumers worldwide.

How does the Iran conflict impact European energy security?

Europe is still balancing post-Russia supply alignment and remains dependent on LNG imports to replace pipeline volumes lost after 2022. Any curtailment from the Gulf would increase reliance on U.S. LNG exports, potentially tighten U.S. domestic gas balances, and push European gas benchmarks higher. Major producers with Middle East exposure could see output risk and market volatility if the conflict widens.

What is the short-term outlook for the industry?

Gas is absolutely critical for power generation, petrochemicals, fertilizer production, and industrial manufacturing, so a tight supply would ripple into higher electricity prices, increased fertilizer costs, and broader inflationary pressures, particularly in gas-importing economies.

The international gas supply chain is highly sensitive to disruptions in the Middle East and even temporary outages can create price volatility, while prolonged escalation could materially reshape global gas trade flows, pricing benchmarks, and energy security strategies.