Iran has partially suspended production at the South Pars gas field — the world’s largest — after an Israeli airstrike triggered a fire at the site, the semi-official Tasnim news agency reported on June 14, according to Reuters. If confirmed, it would mark the first Israeli strike targeting Iran’s vital oil and gas infrastructure. The South Pars field, located offshore in southern Bushehr province, is responsible for the bulk of Iran’s gas output. Tehran shares the field with Qatar, which refers to its portion as the North Field. A strike on South Pars represents a significant escalation, coming after oil prices surged 9% on June 13 following Israel’s initial wave of attacks, which had not targeted energy infrastructure, Reuters reports. Israel launched its air offensive against Iran on June 13, killing commanders and scientists and bombing nuclear sites, in what it described as an effort to prevent Tehran from developing nuclear weapons. The Iranian oil ministry said the fire caused by the strike has been extinguished. According to Tasnim, the fire broke out in one of four units of Phase 14 at South Pars, halting the production of 12 million cubic meters of gas. Iran, the world’s third-largest gas producer after the United States and Russia, produces around 275 billion cubic meters of gas per year, about 6.5% of global output. Due to international sanctions, the country consumes most of this domestically. Qatar, which operates the majority of the shared field with support from global firms such as Exxon and Shell, produces 77 million tonnes of liquefied natural gas annually, supplying both European and Asian markets.
Israel’s Haifa Oil Refinery Damaged in Missile Strike
Iranian missile attack caused damage to the Haifa refinery in Israel over the weekend, prompting a partial shutdown, Israeli media reported, saying the facility remained operational. The damage, according to the Haifa refinery’s operator, Bazan, was localized at pipelines and transmission lines, the Times of Israel reported. The publication added that Iran launched some 40 missiles at the Haifa area on Saturday night. “The refining facilities continue to operate, while some downstream facilities at the complex have been shut down,” Bazan said in a statement, as quoted by Argus. Israel, meanwhile, struck two gas treatment plants in southern Iran and an oil storage site in Tehran, which caused fires at two or three storage tanks. Missiles continue flying, with Iran targeting Tel Aviv and Haifa, with worry rising that the conflict will continue escalating, possibly culminating in disruption of oil flows via the Strait of Hormuz, which handles over 20 million barrels daily in oil exports. Further Israeli attacks on Iranian oil infrastructure are also a distinct possibility. “If Iranian crude exports are disrupted, Chinese refiners, the sole buyers of Iranian barrels, would need to seek alternative grades from other Middle Eastern countries and Russian crudes,” S&P Global Commodity Insight’s head of near-term oil analysis, Richard Joswick, said, as quoted by Reuters. “This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia,” Joswick added. Tanker owners are already refusing to send their vessels to the Persian Gulf and pulling out the ones that are already there, with the chief executive of Frontline, the world’s largest tanker operator, saying that “Trade is going to become more inefficient and, of course, security has a price.”