Striking the Jugular: How Israeli Attacks on Iran's Oil Infrastructure Could Convulse Global Markets

New Delhi: Israel has attacked some of Iran’s most important oil and gas sites — something that hasn’t happened before, even though the two countries have been rivals for many years. This move has raised concerns that the conflict could grow bigger and more dangerous. It also puts global markets at risk, especially oil prices, as such attacks can disrupt the supply of energy and create uncertainty around the world.

Late on Saturday, 14th June, Iran’s Petroleum Ministry reported that Israel had hit a major fuel storage site. At the same time, a fire broke out at another oil refinery in Tehran, the country’s capital. Firefighters were seen rushing to control the flames at both locations.

Iran has also had to partly stop operations at the South Pars gas field — the largest in the world — after a fire broke out there on Saturday due to an Israeli attack. This gas field is shared with its neighbour Qatar, and the fire has affected its normal production.

The latest fighting started on Friday,13th June, when Israel attacked Iran’s military and nuclear locations and killed several high-ranking military officers and nuclear experts. In response, Iran launched ballistic missiles and drones at several cities in Israel. This back-and-forth has sparked global concern, with many countries urging both sides to calm the situation.

Iran’s health ministry said that 224 people have died since Israel began its attacks on Friday. They also reported that 1,277 people have been admitted to hospitals. According to the ministry, more than 90% of those killed or injured were ordinary civilians.

Israel’s unexpected attacks on Iran’s key energy sites could seriously affect the flow of oil from the Middle East. This may lead to a rise in fuel prices around the world. The situation remains tense, as both countries continue to warn each other of stronger attacks ahead.

Which Key Sites Were Targeted in Israel’s Attacks on Iran?

Iran holds the world’s second-largest natural gas reserves and ranks third in crude oil production, with an output of around 3.3 million barrels per day. The top two oil producers are the United States (21.9 million BPD) and Saudi Arabia (11.1 million BPD), according to data from the U.S. Energy Information Administration (EIA). Due to its major role in global energy supply, Iran’s oil and gas infrastructure has long been considered a likely target in any conflict with Israel.

READ MORE: Middle East On Boil As Israel And Iran Unleash Missiles At Each Other, Air Space Closed, Death Toll Rises | Republic World

What is Natural Gas?

Natural gas is a type of fuel found deep underground. It is made mostly of a gas called methane. It is used in many ways:

For cooking and heating in homes
To power factories

To generate electricity

As fuel for some vehicles

Natural gas is important because it burns cleaner than coal or oil, making it a key energy source for many countries.

Before the current escalation, Israel mostly stayed away from attacking Iran’s oil and gas facilities. This was mainly because of pressure from its allies—especially the United States—who were worried that such strikes could disrupt global energy supplies and cause oil and gas prices to rise sharply.

Things have now taken a different turn.

On Friday, Israel’s Defence Minister, Israel Katz, issued a strong warning saying that if Iran responded to Israel’s attacks, then “Tehran will burn.”

By late Saturday, large fires had broken out at two key locations in Tehran. One was at the Shahran fuel and gas storage site in the northwest part of the city, and the other was at one of Iran’s largest oil refineries in Shahr Rey, located in the south.

According to Al Jazeera, Iran’s Student News Network later stated that the Shahr Rey refinery was not targeted by an Israeli attack and continued to operate normally. However, they acknowledged that a nearby fuel tank had caught fire, though they did not provide any details about what started the blaze.

However, Iran’s Petroleum Ministry confirmed that the Shahran fuel depot was hit by an Israeli strike. Firefighters are still working to put out the fire at the site.

Israel’s airstrikes also hit the South Pars gas field, located off the coast of Iran’s southern Bushehr province. This is the world’s largest natural gas field and provides about two-thirds (around 66%) of Iran’s total gas supply, which is mainly used within the country. Iran shares this massive gas field with its neighbour Qatar, where it is known as the North Field.

According to the semi-official Tasnim news agency, the attacks caused serious damage and a fire at the Phase 14 natural gas processing plant. They also forced the shutdown of an offshore platform that usually produces 12 million cubic metres of gas per day.

In another Israeli strike, a fire reportedly started at the Fajr Jam gas plant, one of Iran’s biggest fuel processing centers, located in Bushehr province. This facility handles gas from the South Pars field. Iran’s Petroleum Ministry confirmed that the plant was indeed hit in the attack.

Why Do These Sites Matter?

The Shahran oil depot is one of the biggest fuel storage and supply centers in Tehran. It can hold up to 260 million litres of fuel in its 11 large tanks. This depot plays a key role in the city’s fuel system, sending petrol, diesel, and aviation fuel to various terminals in the northern part of Tehran.

The Tehran Refinery, found just south of the capital in the Shahr-e Rey area, is run by the government-owned Tehran Oil Refining Company. It is one of Iran’s oldest refineries and can process nearly 225,000 barrels  of oil each day. Experts say that any trouble at this site—no matter what caused the fire—could seriously affect fuel supply in Tehran, which is the country’s most crowded and economically important region.

In the south, the South Pars gas field, located offshore in the Gulf, holds about 1,260 trillion cubic feet of gas that can be extracted. This makes up nearly 20% of the world’s known natural gas reserves, making it one of the most important energy sources globally.

The strike on the Fajr-e Jam Gas Refinery in Bushehr province could seriously affect Iran’s supply of electricity and fuel, especially in the southern and central parts of the country, which are already facing major challenges. According to government estimates, power cuts in Iran can cost the economy around $250 million each day.

Global Markets Face Uncertainty

Adding to global market worries, Iran has said it might close the Strait of Hormuz due to the growing conflict with Israel. This narrow waterway is one of the world’s most important routes for oil shipments. If closed, it could cause oil prices to rise sharply.

The Strait of Hormuz lies between Iran on one side and Oman and the United Arab Emirates on the other. It is the only sea route into the Gulf and is extremely important for global energy trade. Nearly 20% of the world’s oil supply passes through this narrow waterway. The U.S. Energy Information Administration (EIA) calls it the “most important oil transit chokepoint” in the world.

On Friday, even though Israel did not target Iran’s oil and gas sites on the first day of the conflict, oil prices still jumped by 9 percent. Prices settled slightly afterward, but experts believe they could rise again sharply when the oil markets reopen on Monday, 16th June

Alan Eyre, a senior defence expert at the Middle East Institute, told Al Jazeera that Israel seems to be trying to draw the United States into joining its attacks on Iran. He said Israel’s main goal might be to either bring down the current Iranian government or at least push for major changes in its leadership.

Eyre explained that Iran doesn’t have many choices. He said Iran will likely feel the need to strike back with force to maintain its image at home. However, he added that it’s highly unlikely Iran can hit Israel hard enough or create enough pressure to make Israel stop its airstrikes.

Eyre also pointed out that Iran doesn’t have strong support from other countries around the world. Even if it did, he said, it wouldn’t make much difference because Israel has clearly shown that it rarely pays attention to what the international community says.