Gigantic losses in Iran and Qatar. Worse than the blockade of Hormuz

Repairing oil and gas installations damaged as a result of the war with Iran may take years and cost at least $25 billion, estimated the Norwegian analytical company Rystad Energy. The cost of damage may exceed the losses resulting from the closure of the Strait of Hormuz.

The largest losses concern LNG installations, refineries and fuel terminals. Particularly serious damage was reported in Qatar's Ras Laffan complex and Iran's South Pars gas field. Damage also included storage infrastructure and processing units, according to the analysis published on Wednesday.

Qatar and Iran were the most affected, but the destruction also affected Saudi Arabia, the United Arab Emirates, Kuwait, Iraq and Bahrain. The scale of losses depends on the type of installations and local capacity to rebuild them.

Repairs can take from several months to up to five years, especially in the case of large LNG installations in Qatar and offshore infrastructure in Iran. The global availability of key equipment – including gas turbines – remains a limitation, with delivery times ranging from two to four years.

According to Norwegian analysts, the effects of the destruction may be more serious than closing the Strait of Hormuz. Losses caused by the blockade will mainly concern the transport of oil and gas, not production capacity. Even if shipping is restored, the damaged infrastructure will not allow for a quick recovery of pre-conflict supply levels.

Rystad Energy is an independent analytical company from Oslo, specializing in the energy market, providing data and forecasts for governments, international institutions and corporations, including OPEC, the International Energy Agency (IEA) and the World Bank.

From Oslo Mieszko Czarnecki (PAP)

cmm/ adj/