A series of Israeli attacks on Iran’s oil and energy installations threatens to cause further disturbances in the markets, as worries about escalating in an area that hosts half of the oil reserves of the world.

What was hit?

On Saturday, Israel hit two natural gas processing facilities on the south coast of Iran, which process gas from the South Pars deposit – the largest gas deposit in the world. The deposit extends to nearly 4,000 square miles below the Persian Gulf and reaches Qatar, where it is known as North Field.

One of the offshore platforms of the deposit stopped production after the attack, although it was reported that it was not severely damaged. Installations receive natural gas from the deposit and convert it into methane for domestic use, as well as liquefied oil gas (LPG) and ethnane, which is a raw material for petrochemical factories, the Financial Times explains in their analysis.

Israel also attacked the fuel and gasoline tank in Sahran, in a middle -class district in the northern part of Tehran, as well as in storage tanks in Sahr Ray, southern part of the city.

The Shana news agency said the situation in the South Pars deposit and oil reserves in Tehran was “fully under control”. He added that the amount of fuel on Tehran’s premises was “low” at the time of the attack. A Fire Department spokesman said the fires in Sahran were not caused by a petrol explosion, but by another oil derivative. At the same time, the Shahid Tondguyan petrochemical factory and the driller’s refinery have disrupted that they were hit.

What is Israel’s goal

Attacks show that Israel is trying to weaken and disrupt Iran’s internal supply chains into gas and fuel, causing shortages, instead of targeting the production or exports of oil and gas, which would cause turmoil in international markets. The country’s largest refinery is located in Abadan, with the possibility of processing 500,000 crude oil barrels a day.

Impact on energy markets

Although I have not had an impact on Iran’s oil exports so far, the escalation of the collision in critical energy infrastructures is worried about investors. There is a fear that Iran can respond by targeting energy facilities in other Gulf countries, such as Saudi Arabia and the UAE, or blocking the flow of oil and gas through the Straits of Ormuz – where 1/3 of the world is passing through the world.

The oil market remains closed over the weekend and is expected to reopen Monday morning in Asia.

How can Iran answer?

Israel’s energy infrastructure itself is vulnerable. On Sunday, Bazan, the manager of one of Israel’s largest refineries in Haifa, announced that pipelines and lines of transport to the complex suffered damage to Iranian missile attacks. The refinery continued to operate, but some units were shut down. There were no injuries. Bazan’s share fell 1.3% to morning transactions.

Israel has also shut down the gas deposits of Karis and Leviathan for precautionary reasons, although other deposits continue to operate. Its electricity grid is not interconnected with neighboring countries and is based on natural gas for about 70% of its power generation.

Iran has repeatedly threatened that it will close the straits of the Ormuz. However, most analysts find this extremely unlikely, as it would cause the reaction of all states in the region and China – the largest importer of Iranian oil.

So far there are no signs of serious navigation disorders, but Iran could start targeting selective ships. In April 2024, Iranian commando occupied the MSc Aries cargo ship, which claimed to be linked to Israel.