Iran accused Israel of striking its facilities in the huge South Pars gas field on Wednesday in a major escalation in the U.S.-Israeli war that sent oil prices shooting higher, and retaliated by vowing attacks on oil and gas targets throughout the Gulf, firing missiles at Qatar and Saudi Arabia.
Qatar’s state oil giant QatarEnergy reported “extensive damage” after the Ras Laffan Industrial City, an energy-industry hub, was hit by Iranian missiles. Saudi Arabia said it had intercepted and destroyed four ballistic missiles launched toward Riyadh on Wednesday and an attempted drone attack on a gas facility in the east of the country.
South Pars is the Iranian sector of the world’s largest natural gas deposit, which Iran shares with Qatar, a close U.S. ally, across the Gulf. Qatar’s foreign ministry rebuked Israel for a “dangerous and irresponsible” attack on Iran’s South Pars facilities, and denounced Iran for what it called “a flagrant breach” of international law, expelling two senior Iranian diplomats.
The escalation adds to the unprecedented disruption of global energy supplies that has raised the political stakes for U.S. President Donald Trump, who joined Israel in attacking Iran nearly four weeks ago. Diesel prices in the U.S. have already risen above $5 a gallon for the first time since the 2022 inflation surge that eroded support for his predecessor, Joe Biden.
The conflict quickly spread to neighboring countries and has already halted shipping from the world’s most important energy-producing region, and could now bring lasting damage to its infrastructure. Benchmark Brent crude prices rose around 5% to above $108. Stock markets veered lower.
In Washington, U.S. spy chief Tulsi Gabbard told Congress Iran’s government has been degraded since the war began on February 28, but it appears to be intact, with Iran and its proxies still capable of attacking U.S. military bases and other interests it has in the Middle East.
U.S. producer prices increased by the most in seven months in February, driven by higher costs for services and a range of goods, and could accelerate further as the war boosts oil prices.
Israel has not publicly claimed responsibility for the attack on South Pars. According to the Wall Street Journal, which cited unnamed U.S. officials, Trump knew of Israel’s plan to attack the gas field in advance and supported it.
Iran’s Fars news agency reported that gas tanks and parts of a refinery had been hit. It said workers had been evacuated and state media later said the fire there was under control.
Iran listed several prominent regional oil and gas facilities it called “direct and legitimate targets”, all in nearby states that host U.S. military bases: Saudi Arabia’s Samref Refinery and Jubail Petrochemical Complex, the UAE’s Al Hosn Gas Field, and Qatar’s Mesaieed Petrochemical Complex, Mesaieed Holding Company and Ras Laffan.
It said they should be evacuated at once before its missiles fell.
The U.S. and Israel had previously held back from targeting Iran’s energy production facilities in the Gulf, averting Iranian retaliation against the oil and gas industries of its neighbours. International law forbids states from attacking civilian energy infrastructure.
France’s President Emmanuel Macron said he spoke with the emir of Qatar and Trump on Thursday and called for a “moratorium on strikes targeting civilian infrastructure”, especially water and energy facilities.
Iran has already effectively shut the Strait of Hormuz, which handles 20% of global oil and liquefied natural gas supply, but consuming nations have hoped the disruption would prove short-lived as long as production infrastructure was spared.
European Union foreign policy chief Kaja Kallas spoke by phone on Wednesday with Iranian Foreign Minister Abbas Araqchi and said safe passage through the Strait was a priority for Europe and that the EU supports a diplomatic solution to the war.
‘EVERYONE IS IN THE CROSSHAIRS’
The Israeli military also hit central Beirut, destroying apartment buildings in some of the most intense airstrikes on the Lebanese capital for decades.
Israel killed Iran’s intelligence minister Esmail Khatib on Wednesday, a day after killing powerful security chief Ali Larijani. Israeli Defence Minister Israel Katz said “no one in Iran has immunity and everyone is in the crosshairs.”
He and Prime Minister Benjamin Netanyahu had authorised the Israeli military “to target any senior Iranian official for whom an intelligence and operational opportunity arises, without the need for additional approval.”
In Tehran, thousands appeared in the streets for a funeral for Larijani and other slain figures.
Iran has retaliated by firing cluster missiles at Israel, which are harder to cleanly intercept. Shortly after midnight on Thursday, Israel’s ambulance service said a foreign national had died in Adanim in central Israel after an Iranian missile attack, bringing the death toll in Israel to at least 15 people. Wednesday also saw the first deadly strike in the Israeli-occupied West Bank: three Palestinian women were killed after an Iranian missile attack, the Palestinian Red Crescent said.