Repair cost for war-hit Middle East energy assets seen at $25bn

• Ras Laffan may take up to 5 years to recover
• Equipment supply faces backlog, Rystad says
• Restoration will incur conflict-inflated costs

The repair costs for Middle Eastern energy infrastructure are forecast to reach at least $25 billion based on an initial assessment of facilities affected by the Iran war, a Norway-based energy research company said.

The conflict, which started on February 28, has caused global supply disruptions in oil and gas, with several liquefied natural gas (LNG) trains, refineries, fuel terminals and critical gas-to-liquids facilities across the region damaged or shut, Rystad Energy said in a report.

Nearly 49 percent of the spending is expected to go towards engineering and construction, followed by 39 percent for equipment and materials. The remaining 12 percent is equally split between operations, logistics and vessels.

According to the report, Qatar’s Ras Laffan Industrial City may take up to five years to recover fully after the destruction of LNG trains S4 and S6. The damage has triggered force majeure and a 17 percent capacity reduction to about 12.8 million tonnes per annum.

The long recovery period could partly be due to limited equipment supply. The only three original equipment manufacturers (OEMs) globally entered 2026 with production backlogs of two to four years, driven by demand for data centre electrification and coal plant retirements.

“The Gulf region’s recovery will be defined less by financial capital and more by structural constraints. While some assets may be restored within months, others could remain offline for years,” said Audun Martinsen, head of supply chain research at Rystad Energy.

Iran’s South Pars offshore field and Qatar’s Ras Laffan stand out as particularly concerning.

The scale of the damage and the long lead times for critical equipment could result in a slow recovery at Ras Laffan, he said. Iran’s exclusion from Western supply chains means it will have to rely on Chinese and domestic contractors, which could be slower and more expensive. 

In Bahrain, the Bapco Sitra refinery was hit twice, damaging two crude distillation units and a tank farm, resulting in the declaration of force majeure across the group’s operations. The refinery completed a $7 billion modernisation programme in December last year.

Restoring the units is likely to require international contractors to be re-mobilised at conflict-inflated costs and under uncertain war-risk insurance, the report said.

Further reading:

• CERAWeek panellists deliver stark warning on Iran
• Dozens of energy assets ‘severely’ damaged during Iran conflict
• The big question in Houston: what does the US want from the Gulf?

In addition, there were moderate-to-minor disruptions in other countries, including the UAE, Kuwait, Iraq and Saudi Arabia.

The speed of recovery in the region will depend on execution capacity and the timing of capital deployment as repair spending ramps up.

Operators are likely to prioritise restoring existing fields instead of new developments, creating demand for engineering, procurement and construction contractors and OEMs, especially those with regional experience and agreements with national oil companies, Martinsen said.