For Iran, attacks on its gas infrastructure are like death

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented on the strikes on the gas infrastructure of Iran and Qatar consequences for the global gas market.

Consequences of strikes on Iran's gas production

As for the attack on South Pars, there is no clear picture yet, apparently, the damage concerns the main gas processing facilities, but it is unclear how serious they are.

The impact on South Pars has virtually no effect on the global market. This is a major problem for Iraq and for Iran's domestic market. Iran is interconnected with the world market only through Turkey, and that is rather weak.

But for Iran itself, any attacks on its gas infrastructure are like death, because the entire economy of Iran's domestic market is based primarily on natural gas.

Almost the entire electric power industry runs on gas (86% of generation), as well as a significant part of transport, household consumption, and industry — Iran is one of the world's leading economies in terms of gas intensity.

Consequences of strikes on Qatar's gas infrastructure

Therefore, Iran, realizing this perfectly well, immediately hit Qatar. This is the only significant goal in the region that directly affects the global market. We can see this today by the growth of quotations: the price at the TTF hub is already hovering around $800 per thousand cubic meters.

Iran will continue to have the opportunity and desire to attack Ras Laffan, which is one of the most convenient targets for attacks. Moreover, Iran felt that any attacks on Ras Laffan would immediately affect the global gas market.

I think both Qatar and the United States are well aware that this may not be the last blow.

Risks to the global gas market from attacks on Iran and Qatar

This attack poses the risk of further supply reduction after the unblocking of the Strait of Hormuz. In addition, new strikes will lead to further capacity depletion. This is driving the gas market this year, if not into a deficit, then at least it certainly deprives the market of the prospects of reaching a surplus, which was expected by everyone and almost inevitable without this war. Accordingly, there was confidence that prices would go down this year, especially towards the end of the year. The gas market was not ready for such events at all. No one expected this.

And, of course, the timing of the commissioning of Qatar's new facilities is also a big question now. The first ones were planned in January 2027. But this schedule, apparently, will no longer be able to be met.