War Escalates To Dangerous New Level

The US-Israel attack on Iran took a significantly serious turn on March 17 when Israel struck the South Pars gasfield, the backbone of global LNG supplies. Till then, only military sites were attacked but once, the energy site was targeted, the war had shifted to the next level, spiraling into a full-blown oil war.

Brent crude oil prices surged to $110 per barrel, while the benchmark gas price also jumped by 6%.

South Pars gasfield, which Iran shares with Qatar, is the world’s largest and is the backbone of global LNG supplies, including India too. Soon after Israel attacked the gasfield, there had been an immediate spike in oil and gas prices, which can help one gauge the importance of the energy asset.

The attacks on the energy assets will have a serious effect on India, which is among the world’s largest LNG buyers. India imports 80-85% of LPG from Qatar and Saudi Arabia. Primarily, LNG is used by fertilizer plants and gas networks supplying piped gas to households and CNG to vehicles.

After the South Pars gasfield was attacked, Iran retaliated by targeting gas facilities in Qatar and UAE. Retaliating to the attack, Iran aimed drones and missiles at Aramco’s Samref refinery in Saudi Arabia.

Not stopping with that, Iran targeted UAE’s Habshan gas facility and Bab field. Habshan is one of the world’s largest gas processing facilities. Tehran is also targeting to strike oil and gas facilities in Saudi Arabia too.

Tehran also targeted two oil refineries in Kuwait, including Al-Ahmadi facility, one of the largest in the Middle East.

The strikes on gas facilities would disrupt energy supplies leading to hike in fuel prices and subsequently economies.

According to Reuters reports, South Pars gasfield contains 1,800 trillion cubic feet of gas sufficient to meet the world’s needs for 12-13 years.