Israel struck Iran's South Pars natural gas field — the crown jewel of the country's energy sector — on March 18, marking a formal entry into an extreme phase of mutual energy infrastructure destruction. Following the attack, Iran's Islamic Revolutionary Guard Corps (IRGC) launched missiles at Qatar and Saudi Arabia.Reuters reported "widespread damage" at Qatar's Ras Laffan Industrial City, which processes approximately one-fifth of the world's liquefied natural gas supply.Al Jazeera noted that oil at $200 per barrel "is no longer far-fetched."
Israel struck the world's largest natural gas field on March 18, following the killings of Iranian Intelligence Minister Esmail Khatib and top security official Ali Larijani, theAssociated Press reported. An informed source told the AP that the United States had advance knowledge of Israel's plans to strike the South Pars field but did not participate in the attack. The source, speaking anonymously because they were not authorized to comment publicly, declined to say whether the Trump administration had approved the strike on the field — a facility that serves as the backbone of Iran's energy supply.
Energy Infrastructure Comes Under Attack
Following Israel's strike on South Pars, located in Iranian waters of the Persian Gulf, Iran immediately launched retaliatory strikes against energy facilities in neighboring Gulf states. Targets included Saudi Arabia's Eastern Province, Kuwait, Bahrain, Qatar, and the United Arab Emirates. Arab states issued sharp warnings on March 19, calling the strikes a "dangerous escalation" that risked drawing them into direct conflict with Tehran. Qatar, Saudi Arabia, and the UAE all condemned Iran's attacks on their gas facilities. The Saudi government stated that the strikes represented the "complete collapse of whatever trust remained."
The AP noted that it remains unclear what military response, if any, Gulf states will pursue, as they have sought to avoid being drawn into the conflict alongside the United States and Israel. While Israel has not formally claimed responsibility for the South Pars strike, Defense Minister Israel Katz previously confirmed that Israel killed Iran's intelligence minister in an airstrike and pledged further "surprise" operations aimed at weakening the leadership of Tehran's theocratic government.
Iran condemned the South Pars attack. President Masoud Pezeshkian warned it would produce "uncontrollable consequences" that "could engulf the entire world." U.S. President Donald Trump said Israel would not strike South Pars again, but posted a warning on social media that if Iran continued attacking Qatar's energy infrastructure, the United States would retaliate and "massively destroy" the entire gas field.
Trump posted on social media: "I did not want to authorize this level of violence and destruction, because it will have a long-term impact on Iran's future."
More than 1,300 people have been killed in Iran since the conflict began. According to the Lebanese government, Israeli airstrikes have displaced more than one million people in Lebanon — roughly 20% of the population — and killed 968. In Israel, Iranian missile strikes have killed 14 people. At least 13 U.S. military personnel have been killed. The Palestinian Red Crescent reported that Iranian missile strikes on the West Bank town of Beit Awa killed at least three people and wounded 13 others.
Oil-Producing Nations Engulfed — Prices Surge Again
Beyond Qatar, Iran also struck the Habshan gas facility and the Bab gas field in the United Arab Emirates. The UAE government described the attacks as a "dangerous escalation" in the war between Iran and Israel and the United States. Abu Dhabi authorities said gas operations at those sites were shut down after the strikes were intercepted. QatarEnergy stated that a missile struck one of its large liquefied natural gas facilities, triggering a fire that caused "widespread" damage.
The strikes on Qatar and the UAE intensified pressure on Gulf states that have been absorbing Iranian attacks on their military bases, civilian infrastructure, and energy facilities since the conflict escalated on February 28 — without retaliating against Tehran. With Iran maintaining its blockade of the Strait of Hormuz — through which approximately one-fifth of the world's oil supply passes — international oil prices surged another 5%, surpassing $108 per barrel.
As the Trump administration sought ways to increase global oil supply, the U.S. Treasury Department eased sanctions on Venezuela on March 18, allowing American companies to conduct business with Venezuela's state oil and gas companies. However, Al Jazeera warned that if the conflict does not abate and the Strait of Hormuz remains blocked, oil prices reaching $200 per barrel cannot be ruled out.
Brent crude, the global benchmark, approached $120 per barrel as Middle East hostilities spread, holding above $100 since March 13. Israel's strike on South Pars on March 18, followed by Iran's retaliatory attacks on Gulf energy infrastructure, pushed prices above $108 per barrel.
Vandana Hari, founder and oil market analyst at Vanda Insights, said: "Middle Eastern benchmarks like Oman and Dubai have already broken through $150, so $200 is already within reach, even if Brent or WTI hasn't gotten there yet." Hari emphasized that how much further prices rise depends almost entirely on how long the Strait of Hormuz remains blocked.
The Hormuz Blockade: Daily Supply GapSurpasses 10 Million Barrels
The Strait of Hormuz, which controls roughly one-fifth of global oil supply under normal conditions, has become a geopolitical flashpoint. Since Iran announced the blockade early in the conflict and threatened to strike any vessel attempting to pass, shipping through the strait has nearly ceased. Trump sought to assemble an international convoy escort fleet to reopen the waterway, but found few takers. Countries have instead rushed to negotiate private safe-passage agreements with Iran. Only a small number of vessels flying the flags of India, Pakistan, Turkey, and China have been permitted through.
Although the International Energy Agency (IEA) coordinated a release of 440 million barrels from member states' strategic reserves, the drawdown has not been sufficient to offset the disruption caused by the blockade. OCBC Group Research, based in Singapore, estimated that even with the emergency reserves, the global market faces a daily supply shortfall of approximately 10 million barrels.
Chad Norville, president of the industry publication Rigzone, said: "If the market believes supply can meet demand, strategic reserves might stabilize prices — but if Hormuz flow is substantially disrupted for an extended period, prices well above $100, even approaching $200, is a completely reasonable inference." Norville warned that, compared with the Gulf War era, the current supply-demand imbalance and the proportion of global supply at risk could produce even more severe market volatility.
Adi Imsirovic, an energy specialist at the University of Oxford, also assessed that oil reaching $200 per barrel is "entirely possible," arguing it would act as an emergency brake on the global economy — driving inflation, suppressing growth, cutting employment, and causing severe shortages of everyday goods dependent on fuel, fertilizers, and plastics.
A more cautious view came from Sasha Foss, an energy market analyst at Marex in London, who described $200 Brent as "fairly absurd," pointing to sharply increased production in the United States, Canada, Argentina, Brazil, and Guyana, as well as alternative pipeline routes such as Saudi Arabia's East-West Pipeline. Bob McNally, president of Rapidan Energy Group, argued that elevated prices inherently suppress consumption, and that once prices spike beyond a certain threshold, demand destruction will eventually bring them back down.
