As direct clashes between Iran and Israel escalate, the risk of the conflict expanding to include economic targets is rapidly increasing, particularly in the Gulf region, home to the world’s richest oil and gas fields. This has brought the Strait of Hormuz, the world’s most critical energy chokepoint, back into the global spotlight.
During Israel’s first round of strikes on Friday, energy infrastructure was not targeted, which helped calm global oil markets temporarily. But on Saturday, Iranian media reported that a massive fire erupted at the South Pars gas field in Bushehr province, in southern Iran, following an Israeli strike on key energy infrastructure.
The South Pars field lies along the Arabian Gulf, near the maritime border with Qatar. Video footage showed flames engulfing Phase 4 of the Pars refinery. According to Tasnim News Agency, the attack hit Unit 14 of the field, temporarily halting the production of 12 million cubic meters of gas per day until the damaged section is restored.
Hours later, Iran’s Ministry of Oil announced that the fire at South Pars and the Fajr Jam refinery had been brought under control.
This marks the first time Israel has targeted Iran’s southern coastal region, which borders the Gulf—signalling a dangerous new escalation in Tel Aviv’s war campaign.
Iran Hints at Shutting Down Hormuz
Iranian MP Esmail Kowsari, a member of the national security committee, told IRNA (Islamic Republic News Agency) that Tehran is seriously considering closing the Strait of Hormuz.
The Strait of Hormuz, located between Oman and Iran, is the world’s most vital oil shipping route, serving as the main artery for Gulf crude exports and a large share of global liquefied natural gas (LNG).
A narrow waterway at the heart of the Gulf, it is often referred to as the “lifeline of the industrial world.” Nearly two-thirds of the world’s consumed oil flows through this route.
Historically, the strait has been a flashpoint in global power struggles. During the 1973 Arab-Israeli war, Arab states halted oil shipments via Hormuz to the U.S. and Europe due to their support for Israel. The strait continues to be a strategic pressure point in the standoff between Iran and the West.
Iran has repeatedly threatened to close the Strait in response to Western pressure and sanctions. Experts warn that such a move would cripple global trade and send oil prices skyrocketing.
The Oil Artery at Risk
The Strait of Hormuz:
- Lies between Iran and Oman, connecting the Arabian Gulf with the Gulf of Oman and Arabian Sea.
- Measures just 33 km wide at its narrowest point, with 3 km lanes in each direction for inbound and outbound traffic.
- Handles about 20 million barrels of oil per day—nearly one-fifth of global oil consumption.
- Serves as the main export route for Saudi Arabia, Iran, UAE, Kuwait, and Iraq—all OPEC members, with Asia as their primary customer.
- Qatar, the world’s largest LNG exporter, ships virtually all of its LNG through the Strait—making up around 25% of global LNG trade.
Alternatives to Hormuz Are Limited
Two existing pipeline routes serve as partial backups:
- Saudi Arabia’s East-West Pipeline, which moves oil from the Eastern Province to the Red Sea port of Yanbu.
- The Habshan-Fujairah Pipeline in the UAE, which carries oil from Abu Dhabi to Fujairah, bypassing Hormuz.
According to the U.S. Energy Information Administration, as of June last year, only 2.6 million barrels/day of unused capacity across these pipelines could serve as a stopgap.
That’s a fraction of the oil typically transported through Hormuz.
Even worse, if Yemen’s Ansarullah (Houthis) join the conflict, they could block the Bab al-Mandab strait at the Red Sea’s southern entrance—effectively cutting off Gulf oil exports to Asia altogether.
This kind of move wouldn’t directly harm Israel—but it would deal a crippling blow to the U.S. and Western economies by triggering a global energy price explosion.
Iran’s Possible Counterattack on Israeli Energy Sites
Should Israel expand its campaign to target Iran’s oil and gas infrastructure, Tehran is likely to retaliate against Israel’s energy sector. Potential targets include:
- Haifa Refinery (north)
- Ashdod Refinery (central coast)
- Offshore gas platforms like Tamar, Leviathan, and Karish
A successful strike on any of these assets would be a severe blow to an Israeli economy already straining under the costs of a war it has waged on Gaza for over 20 months.
Iran could also strike Gulf oil facilities, not to punish Arab states directly, but to paralyse regional oil exports in response to any blockade or strike on its own output.
