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Mideast crisis puts Iran’s energy facilities at risk

  • Spanish Market: Crude oil
  • 04/10/24

Iran's large-scale missile attack against Israel on 1 October pushed the Mideast Gulf region another step closer to all-out war, with Israel vowing to retaliate hard for what it saw as "a severe and dangerous escalation."

But unlike previous exchanges, which have largely targeted military assets, critical energy infrastructure including oil facilities appear this time to be in Israel's crosshairs.

President Joe Biden on 3 October said the US and Israel are discussing possible strikes on Iranian oil facilities as part of consultations on a response. The Biden administration would not provide any details and the only objection it has voiced publicly is against the prospect of an Israeli strike on sites associated with Iran's nuclear programme.

The escalating conflict in the region, which began with a surprise cross-border attack by Gaza-based Hamas militants on Israel almost one year ago, has had a limited impact on oil prices, because the effect on physical supply has been almost non-existent despite the scale of the fighting and destruction in Gaza, northern Israel and southern Lebanon. Attacks by Iran-backed Houthi militants in Yemen on oil tankers in the Red Sea rerouted some oil trade without affecting global supply.

That could change if Israel makes good on its threat to directly target Iranian oil infrastructure and, especially, if Iran retaliates — as it did in 2019 to a US attempt to cut off its exports — with indiscriminate attacks on oil tankers and infrastructure in the Mideast Gulf.

But the extent of the effect on global supply and price will ultimately depend on Israel's intentions, and what kind of facilities are hit.

"If the objective is to hurt the country economically, then the most obvious target would be Iran's oil export terminals," said Vortexa senior oil risk analyst Armen Azizian.

Despite US sanctions, Iran continues to be a major crude producer — the third biggest in Opec — and a notable exporter. Oil exports averaged around 1.55mn-1.6mn b/d in the first half of this year, rising to 1.65mn-1.7mn b/d in July-August. Early indications suggest September exports were higher still.

Iran has several terminals from where it exports its crude and condensate, all on its Mideast Gulf coast. But one, on Kharg Island, dwarves all others in terms of importance.

"About 90-95pc of Iran's oil exports typically come out of Kharg, with the other 5-10pc coming out of considerably smaller terminals, such as Soroush, Sirri or Lavan," Azizian said. "Hitting one of those smaller streams wouldn't impact Iran too much, operationally. But if they decide to take Kharg offline, we're talking about a hit of around 1.5mn b/d to its export capacity."

Knock-on effects

When Iran was struggling to sell its oil because of sanctions the US imposed in 2018, it had upwards of 60mn-70mn bl in floating storage.

But these have fallen to just shy of 40mn bl, which would only sustain exports of about 1.3mn b/d for a month, Azizian noted.

Iran has onshore storage, but many of the biggest tanks are at Kharg, which could be at risk of damage should the terminal be targeted. An attack on Kharg Island would strike at the heart of the Iranian economy, given how big a chunk of Iran's foreign exchange revenues come from the sale of its oil.

Nearly all Iran's exports are absorbed by refiners in China's Shandong province. But the effect of potentially removing 1.5mn b/d from global supply would be felt far beyond Iran and China, as global markets would be forced to adapt. Crude futures moved higher this week on the prospect of Israeli strikes against Iran.

The Biden administration for the past year has worked to keep the conflict from escalating, in part because of the potential knock-on effects on oil prices — a key consideration in the US election campaign where Biden's vice-president, Kamala Harris, is facing former president Donald Trump.

If the confrontation results in an Iranian outage, avoiding a price rise would require a co-ordinated move by the US and other large consumers and, possibly, by the wider Opec+ group, to ensure supplies can be brought to the market.

Opec+ is holding back close to 6mn b/d of production under a series of formal and voluntary cuts, which it could bring back sooner than currently planned. But doing so in response to an attack on Iran could stoke tensions within Opec and between Iran and its Mideast Gulf Arab neighbours, which improved relations with Tehran in recent years.

The US would be hard pressed to again guarantee the security of key oil infrastructure facilities across the region. The tepid initial US response to a 2019 attack on Saudi state-controlled Aramco's Abqaiq complex and to a 2022 attack on UAE energy facilities prompted regional producers to consider Washington's military security guarantee as falling short.

Kpler senior oil analyst Homayoun Falakshahi sees the the probability of an attack on Kharg Island as low, given China's relations with Israel and Iran.

"I imagine China will put as much pressure on Israel not to target Iran's exports," Falakshahi said.

Refining plans

Alternatively, Israel could opt to target one or more of Iran's 10 oil refineries or condensate splitters that are largely concentrated in the west of the country.

Discussion at an industry conference in Fujairah this week about a possible Israeli retaliation centred on Iran's largest refinery, the recently expanded 630,000 b/d capacity Abadan in Khuzestan province. Targeting Abadan was seen as a less provocative move, while still providing a warning to Tehran that energy installations are ‘in play' and hitting Iran's domestic products supply.

A hit to Abadan would be significant, but not impossible to navigate for Iran, according to Falakshahi, who notes it produces mostly fuel oil, a product primarily consumed domestically with some exported to Fujairah in the UAE, China and Singapore, among other destinations.

Abadan produces other products such as gasoline, which Iran has recently had to begin importing again to meet demand, but output is only enough to meet around 12-13pc of consumption.

"It will primarily impact the local market, but little else," Falakshahi said. "But not to the same extent as if, say, the 360,000 b/d Persian Gulf Star condensate splitter was targeted, as that alone delivers enough to meet around 20-25pc of local gasoline demand."

Gasoline is a politically-sensitive issue in Iran, with even minor changes in the price of the road fuel sometimes sparking charged demonstrations and riots. More than 200 people were killed in riots in November 2019 triggered by a sudden cut to subsidies that resulted in a sharp increase in gasoline prices.

Israel has so far not given any public hints as to when it plans to retaliate or how. But with tensions in the region already at the highest they have been for some years, Iran will be on high alert, and upping security where it can.

A trading source told Argus that Iran's state-owned NIOC has in recent days moved many of its empty tankers away from Kharg Island.

Iran’s oil refineries and terminals

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24/06/25

Cheaper power key to reach UK’s climate targets

Cheaper power key to reach UK’s climate targets

Edinburgh, 24 June (Argus) — The UK's climate plan credibility has improved slightly but no progress has been made to make electricity cheaper, which is key to hit the country's emissions targets, independent advisory body Climate Change Committee (CCC) said in its progress report. The report assesses the UK's progress towards its net zero goals under the current government, which took power in July 2024. The CCC found the UK's 2050 target remains reachable but climate action needs to accelerate, even though policies to cut greenhouse gas emissions have improved. Only half of the 16 key indicators assessed by the CCC, with a relevant benchmark or target, are on track — including offshore and onshore wind operational capacity, sustainable aviation fuel, electric vehicle (EV) charging points and distances travelled by car. EV car sales, heat pump installations, woodland creation and peatland restoration are "slightly off track", while the ratio of electricity to gas prices for households and industries is "significantly off track", the CCC said. The committee noted no progress has been made on actions to lower the cost of power. The government is planning to consult on this "in due course", but CCC urged for actions and timelines. The CCC has identified "ten priority actions" for the year ahead, with cutting the cost of electricity for households and businesses again at the top. Cheaper power will support industrial electrification and "speed up the uptake of clean electric technologies, such as heat pumps and electric vehicles," the CCC said. The transition to renewables will eventually reduce the country's reliance on volatile wholesale gas prices, which are the main driver of electricity prices, it said. "But the government can take immediate action to accelerate this by moving policy costs associated with past schemes, and those that are not directly related to the cost of electricity generation, off electricity bills," the CCC said. Removing electricity policy costs — levied on the unit price of electricity at 20 times the rate of gas — would reduce annual electricity bills by £190 ($258) for a typical household with a gas boiler and by £490 for a typical household with a heat pump, CCC found. "This would bring UK prices into the range of other countries who are ahead on heat pump roll-out," it said. The CCC report assessed policy development from July 2024 to 23 May 2025, so does not take into account policies announced in the recent spending review nor the British Industrial Competitiveness Scheme intended to reduce electricity costs by up to £40/MWh for more than 7,000 electricity-intensive businesses. UK emissions reached 413.7mn t of CO2 equivalent (CO2e) in 2024, including its share of international aviation and shipping, down by 50pc from 1990 and by 2.5pc from 2023, according to the CCC. The year-on-year reductions come mainly from the electricity supply — declining gas generation — and the industry sector. The government will increasingly need to focus on transport, building, agriculture and aviation to reach its emission reduction targets, the CCC said. The report points to encouraging trends in EVs and in heat pump installations, which grew by 56pc on the year, and in woodland creations, but it reiterated action on these fronts must accelerate. Although much of the progress stems from policies set by previous government, the CCC said "bold policies" introduced this year are promising, such as removing planning barriers on renewable deployment and the reinstatement of the 2030 phase-out date for gasoline and diesel vehicles. The market share of new EVs increased on the year in 2024, by nearly 20pc. But CCC noted aviation sector emissions are increasing. The share of sustainable aviation fuel increased to 2.1pc last year from 0.7pc in 2023, but a lot more is required to reach the 10pc SAF mandate by 2030. By Caroline Varin Distribution of past emissions reductions and future emissions savings by sector.pdf Distribution of past emissions reductions and future emissions savings by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump slams Israel and Iran over ceasefire breach


24/06/25
24/06/25

Trump slams Israel and Iran over ceasefire breach

Dubai, 24 June (Argus) — US president Donald Trump today criticised both Israel and Iran over what he said were violations of a ceasefire agreement he helped broker to end a 12-day conflict between the two countries. "We basically have two countries that have been fighting for so long and so hard that they don't know what the [expletive deleted] they're doing," Trump told reporters as he left the White House for the Nato summit in The Hague. Trump said Iran fired a missile at Israel after the ceasefire deadline had passed, and that it missed its target. "Now Israel is going out," he said, adding that he was also unhappy with Israel's response. "I didn't like the fact that Israel unloaded right after we made the deal. They didn't have to unload, and I didn't like the fact that the retaliation was very strong," he said. Trump had announced that the ceasefire would begin around midnight ET on 24 June, ending nearly two weeks of hostilities that included US airstrikes on Iranian nuclear facilities over the weekend of 21-22 June. Earlier today, Israel accused Iran of firing missiles after the ceasefire took effect and vowed to retaliate. Iran's military denied the claim, according to Iranian state media. Trump then took to his Truth Social platform to urge Israel not to respond. "DO NOT DROP THOSE BOMBS. IF YOU DO IT IS A MAJOR VIOLATION. BRING YOUR PILOTS HOME, NOW!" He later posted that Israel would not attack Iran. "All planes will turn around and head home, while doing a friendly ‘Plane Wave' to Iran. Nobody will be hurt, the Ceasefire is in effect!" he said. Trump also commented on the US strikes against Iran's nuclear infrastructure over the weekend. "I think it's been completely demolished. I think the reason we're here is because those pilots, those B-2 pilots, did an unbelievable job," he said. The extent of the damage has not been independently verified. Trump added that Iran would not be able to rebuild its Fordow nuclear facility — the country's main site for enriching uranium to 60pc. "Iran will never rebuild its nuclear… From there? Absolutely not. That place is under rock. That place is demolished," he said. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Israel and Iran agree to ceasefire: Trump


23/06/25
23/06/25

Israel and Iran agree to ceasefire: Trump

Houston, 23 June (Argus) — Israel and Iran have agreed to a ceasefire to begin around midnight ET, President Donald Trump said in a social media post late on Monday, ending 12 days of attacks that included US strikes on Iran over the weekend. Iran will start the ceasefire first, according to Trump, and Israel will follow suit 12 hours later. The ceasefire will not begin until the two countries have completed ongoing military operations. "During each CEASEFIRE, the other side will remain PEACEFUL and RESPECTFUL," Trump wrote on social media. ""On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, ‘THE 12 DAY WAR.'" The fighting appeared headed for escalation in recent days, with the US bombing nuclear sites in Iran over the weekend, and Iran launching missiles at a US military base in Qatar Monday in retaliation. But Iran gave advanced warning of the missiles in what appears to have been an effort to de-escalate the conflict. WTI crude futures closed down by 7pc on Monday , as markets took the tepid Iranian response as a sign Iran did not plan to escalate the conflict. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Iran fires missiles at US military base in Qatar


23/06/25
23/06/25

Iran fires missiles at US military base in Qatar

London, 23 June (Argus) — Iran today fired missiles at a US base in Qatar in retaliation for the weekend attack on its nuclear facilities. The Iranian military said the US' Al-Udeid base was its target. The Qatari government said it intercepted the missiles and there were no deaths or injuries. Tensions in the region have been stretched since the US bombed Iranian nuclear facilities at the weekend. US president Donald Trump today again expressed a desire for regime change in Tehran, which in turn said US military interests were now legitimate targets. Earlier, Qatar closed its airspace and the US and UK embassies there issued safety warnings to their citizens, suggesting this Iranian attack was flagged and expected. The price of Ice Brent crude fell by as much as 4.5pc in the wake of the Iranian attack to an intraday low of $72.48/bl, having hit a five-month high of $81.40/bl earlier in the day. The Iranian move echoes its attacks on US military targets in Iraq after the US' killing of senior Iranian military commander Qassem Soleimani in January 2020. Perhaps mindful of this, foreign firms operating in Iraq today started removing some employees from the country. Regional airlines began cancelling and rerouting flights across the Middle East, with flight tracking showing almost no flights in the air above the Mideast Gulf. By Ben Winkley Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump escalates pressure to keep oil prices down


23/06/25
23/06/25

Trump escalates pressure to keep oil prices down

Washington, 23 June (Argus) — President Donald Trump is pressing domestic oil producers to increase drilling as he works to contain the energy market fallout from a potential escalation in hostilities following US airstrikes on nuclear sites in Iran. Trump said today he was monitoring how the oil industry is responding to the conflict, which depending on Iran's response could disrupt 17mn b/d of crude and refined products that are shipped through the strait of Hormuz. The US carried out air strikes on Iran's Fordow, Natanz and Isfahan nuclear sites early on 22 June local time. Brent crude futures hit a five-month high above $80/bl earlier Monday but had fallen to $73.81/bl as of 1:18 pm ET, after Iran said it had launched an attack on a US military base in Qatar. "EVERYONE, KEEP OIL PRICES DOWN. I'M WATCHING! YOU'RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON'T DO IT!" Trump wrote Monday morning in a post on his social media website Truth Social. Trump followed up by directing the US Department of Energy (DOE) to "DRILL, BABY, DRILL!! And I mean NOW!!!" US energy secretary Chris Wright, in a social media post responding to Trump's instructions, said "we're on it" but did not say what actions he would take. DOE does not have a formal oversight or regulatory role related to oil and natural gas production, although it does manage the US Strategic Petroleum Reserve (SPR). The White House, asked for comment, said Trump was urging his administration to support drilling to keep energy prices low. Since Trump's first day in office, he has "championed domestic energy production to strengthen American economic security", the White House said. DOE did not immediately respond to a request for comment. Trump has sought to increase US oil production by easing regulations, expediting environmental reviews and expanding leasing, but it could take years for those actions to translate into higher production. In the near-term, Trump's most potent tool to reduce prices would be ordering a release of oil from the SPR, which holds 402.5mn bl of crude in four storage sites in Louisiana and Texas. Trump and many other Republican lawmakers were critical of former president Joe Biden for ordering the emergency release of 180mn bl of crude from the SPR in 2022 in the wake of Russia's invasion of Ukraine. Trump has said he wants to refill the SPR to its full capacity of 714mn bl. The White House said Monday it is not yet seeing interruptions to oil flows, but that the "many tools" available to the president and his "commitment to peace through strength" should "all be reassuring to the market". By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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