An Israeli strike on infrastructure tied to Iran’s South Pars gas field has sharply escalated the Middle East conflict, pushing energy infrastructure deeper into the center of the confrontation and heightening fears of broader disruption to global oil and gas supplies.
Iranian state media reported that infrastructure in South Pars and the nearby Asaluyeh energy hub were attacked Mar. 18, while Qatar and Iran blamed Israel for the strike. Israel had not publicly commented at the time of reporting.
South Pars is Iran’s section of the world’s largest natural gas reservoir, which it shares with Qatar, where the same formation is known as the North Dome. The field makes up about a third of the giant reservoir and from which Iran produced 276 bcm of gas in 2024, with about 94% of that volume consumed domestically. The wider reservoir holds an estimated 1,800 tcf of recoverable gas.
The immediate extent of damage at South Pars was not clear, but Iranian and semi-official reports said petrochemical infrastructure, gas tanks, and parts of a refinery were hit. Workers were evacuated and later reports said a fire was brought under control. The attack is especially significant because it extends the conflict more directly into upstream and midstream energy assets that markets had feared could become targets if the war intensified further.
Oil market reaction
Oil markets reacted quickly. Brent crude jumped more than 6% on Mar. 18 to just under $110/bbl after news of the strike, and prices moved still higher in subsequent trading, with Brent reaching about $111/bbl early Mar. 19. European natural gas futures rallied to one-week highs on Mar. 18.
The attack reinforced expectations that regional supply risks will remain elevated and that the conflict may drag on longer than previously expected.
The strike also raised concern over knock-on effects for gas trade and regional energy security. Iranian gas flows to Iraq were halted as Tehran diverted supply to domestic needs, while Qatar described the attack as a dangerous escalation. Iran’s Revolutionary Guards then issued evacuation warnings for energy sites in Saudi Arabia, the UAE, and Qatar, highlighting the risk that attacks could spread to additional oil, gas, LNG, and petrochemical infrastructure across the Gulf.
Qatar's Ras Laffan industrial complex sustained damage from an Iranian missile attack, and Riyadh came under attack on Wednesday night.
For the energy market, the attack on South Pars signifies more than just a symbolic escalation of the situation. It threatens a natural gas production zone situated at the very heart of the Gulf’s energy supply, heightens the risks facing alternative export routes, and further amplifies the uncertainty surrounding the Strait of Hormuz.
