While a ceasefire may silence the gunfire, the massive destruction inflicted on Middle East energy infrastructure has plunged global oil and gas markets into a protracted supply crisis. The reopening of the Strait of Hormuz is merely the starting point of a long road to recovery. On April 8, according to the Wall Street Journal, the war in Iran has severely damaged dozens of refineries, oil fields, and natural gas export terminals across the region. The International Energy Agency estimates that over 40 critical energy assets have been destroyed, triggering the largest supply disruption in history. Research firm Rystad Energy estimated last month that the cost of repairing the region’s energy infrastructure exceeds $25 billion.

　　Following the ceasefire announcement, global benchmark crude prices—Brent crude—plummeted by approximately 12% on Tuesday to $96 per barrel, yet remain significantly above the $60 level seen in early January.

　　Consulting firm Eurasia Group forecasts that even after hostilities end, oil prices will stay above $80 per barrel this year. Eurasia Group’s Managing Director of Energy, Henning Gloystein, stated, "Even if the ceasefire allows the Strait of Hormuz to reopen swiftly, supply pressures will persist."

　　Refining Capacity Devastated: Product Shortages May Last Months

　　Reports indicate that the primary challenge facing global markets post-ceasefire is not crude transportation, but rather the drastic contraction of refining capacity.

　　Gloystein estimates that about one-third of refineries in the Gulf region were damaged in aerial strikes, and this capacity loss "will take at least several months to restore." Even if oil-producing nations resume pumping, the market will still face shortages of refined products such as diesel, gasoline, and aviation fuel.

　　One of the most severely affected facilities is the Ruwais Refinery in the UAE—the world’s largest refinery. Rystad estimates that damage was concentrated in its western sector, which accounts for half of the facility’s total capacity, with full recovery expected to take months.

　　Kuwait faces equally dire conditions. Gloystein noted that damage to Kuwait’s refineries has already caused shortages of marine fuel and aviation fuel in Asia and Europe.

　　Last week, a drone attack triggered a fire at the Mina Al Ahmadi Refinery, compounding losses from multiple incidents in March. The CEO of Kuwait National Oil Company recently stated that returning to full production capacity would require three to four months after the war ends.

　　In Bahrain, state-owned energy company Bapco Energies declared force majeure and suspended contractual obligations following a fire at its Sitra Refinery last month. The refinery, with a processing capacity of around 400,000 barrels per day, had just completed a major upgrade—its damage now represents a significant blow to Bahrain’s refining capacity.

　　LNG Facilities Severely Damaged: Qatar’s Recovery May Extend to 2030

　　The impact on the liquefied natural gas (LNG) sector has been particularly devastating. Ras Laffan in Qatar—one of the world’s largest LNG facilities—has suffered a shutdown of approximately 17% of its capacity due to Iranian attacks. Rystad Energy states that full restoration could extend into the late 2020s, with repair costs estimated at around $10 billion.

　　Qatar Energy confirmed that two of the 14 LNG liquefaction trains at Ras Laffan were damaged. According to analysis by Kayrros analyst Saeed Ali Muneeb based on satellite imagery, one train’s large cryogenic heat exchanger collapsed, while another sustained severe thermal damage.

　　Cryogenic heat exchangers are highly customized components, standing as tall as 15 stories and exceeding 15 feet in diameter, containing thousands of miles of precision piping internally.

　　Exponent engineer Harri Kyt maa stated, "Once destroyed, it must be completely rebuilt from scratch." Manufacturing a replacement unit alone could take more than a year.

　　Additionally, gas turbines powering LNG trains—critical for driving compressors—are experiencing delivery delays of several years due to high demand from data center operations.

　　At the same site, Shell’s high-margin Pearl Gas-to-Liquids facility suffered heavy damage. The company confirmed that one of its two production lines will remain offline for at least one year.

　　The energy crisis’s ripple effects extend beyond infrastructure to ports and upstream production. The Fujairah port in the UAE serves as a key oil loading hub outside the Strait of Hormuz and also functions as a center for oil storage, trading, and vessel refueling. It has been repeatedly targeted by Iranian drones, resulting in intermittent operations.

　　On the upstream side, due to the inability to transport crude, Iraq, Saudi Arabia, Kuwait, the UAE, Qatar, and Bahrain collectively shut down approximately 7.5 million barrels per day of crude output in March, according to U.S. Energy Information Administration data.

　　Sudden well closures pose geological risks as well: rapid pressure drops can lead to wax blockage in wellbores, requiring costly chemical treatments to restart. In some mature fields, this shock can permanently alter reservoir dynamics, causing irreversible production losses.

　　Reconstruction Bottlenecks Multiply: Capital and Talent Both in Short Supply

　　Ground-level reconstruction efforts face compounded bottlenecks. Custom transformers, valves, and gas turbines—already requiring years to replace even in peacetime—are now in critically short supply. Meanwhile, a large number of specialized engineers and welders have departed conflict zones alongside Western contractors, creating a talent gap that cannot be filled in the short term.

　　Fraser McKay, Head of Upstream Analysis at Wood Mackenzie, said the repair bill will erode the approximately $100 billion in planned investments expected this year in the region—encompassing everything from routine maintenance to new project development.

　　He noted that companies will prioritize repair work over growth projects, and competition across the entire energy industry for equipment and skilled labor will further inflate costs.

　　"This isn't just a capital issue—it's a human resources issue," McKay said. "You can't instantly double the capacity available in the region."

　　Kyt maa was unequivocal about the scale of the destruction: "We’ve never seen anything like this before." While a ceasefire may mark the end of warfare, for global energy markets, the real test has only just begun.

　　Source: Wall Street Insights