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While addressing the Rajya Sabha, Prime Minister Narendra Modi on Tuesday warned that the impacts of the war in the Middle East would be felt for a prolonged period, citing disruptions in India's supply of crude oil, natural gas and petrochemicals. The US–Israel–Iran conflict has sent oil prices surging, with Brent Crude trading past $100 a barrel, driven by Iran’s closure of the Strait of Hormuz and tit-for-tat strikes on energy infrastructure across the Gulf. But it is not just the Middle East where energy infrastructure is in flames.
Alongside the Gulf escalation, Ukrainian forces struck at least two refineries and an oil-loading port in Russia as part of the ongoing war. Meanwhile, in the United States, the massive Valero refinery in Port Arthur, Texas, was shut down after explosions and fires tore through the facility.
Together, these incidents, combined with disruptions stemming from the Iran conflict, have staggered global energy markets. Oil prices, which briefly dipped 11% after Donald Trump postponed strikes on Iranian energy assets, have surged back above $100. The Energy Agency described the situation as "the biggest oil disruption in history."
MIDDLE EAST: ESCALATION IN THE IRAN–ISRAEL CONFLICT
Energy infrastructure was targeted as the war in Iran, which began on February 28, escalated. Energy hubs across the Persian Gulf came under attack between March 18 and 20.
Israel struck Iran's South Pars gas field, the world’s largest, triggering retaliatory strikes across the region. QatarEnergy reported "extensive damage" and "sizable fires" at Ras Laffan Industrial City, the world’s largest LNG complex, following Iranian missile strikes on March 19. "Iranian aerial attacks have caused extensive damage to the world’s largest gas plant in Qatar," Reuters reported, noting production halts that could cut Qatar’s LNG export capacity by up to 17%.
Saudi Arabia’s SAMREF refinery in Yanbu, a key Red Sea export hub, was hit by a drone the same day, with damage still being assessed, according to the Saudi defence ministry. Fires also broke out at Kuwait Petroleum Corporation’s Mina al-Ahmadi and Mina Abdullah refineries after drone strikes.
The Associated Press reported that Iran broadened its strikes to Gulf neighbours, while UAE gas facilities were shut after missile interceptions. "These strikes are in retaliation for Israel's attack on a major natural gas field in Iran," NPR noted, warning of wider economic shockwaves. Oil prices spiked to multi-year highs as analysts warned of months-long disruptions.
RUSSIA: UKRAINE DRONE CAMPAIGN INTENSIFIES
In Eastern Europe, Ukraine has intensified its campaign targeting Russian energy infrastructure to disrupt military fuel supplies.
On March 21, Ukrainian forces struck Rosneft's Saratov refinery, damaging a secondary processing unit and a 10,000-cubic-metre storage tank. "A processing unit and a vertical storage tank were damaged at the Saratov plant, which produces fuel for Russia's military," Bloomberg reported, citing Ukraine's General Staff.
Further strikes targeted the Baltic Sea oil terminal at Primorsk and a refinery in Ufa on March 23, igniting storage tanks and disrupting exports, Al Jazeera reported, citing satellite imagery and Ukrainian confirmation. Some barrages involved nearly 300 drones and hit targets as far as 1,400 km from the Ukrainian border.
Even as such attacks threaten infrastructure, Russia has been trying to keep exports flowing by leaning on strong Asian demand. Earlier this year, Urals and KEBCO crude loadings from the Baltic ports of Primorsk and Ust-Luga were projected to rise sharply as sellers sought to capitalise on firm prices, according to a report from Reuters on January 23. 70% of these cargoes had been heading to India, which has emerged as a top buyer of Russian crude after European demand collapsed.
India’s oil imports had surged to multi-month highs in December 2025, driven by discounted Russian oil. With the choking of imports via the Strait of Hormuz, India will become more dependent on Russian oil imports. But that demand would be difficult to meet if Moscow's oil refineries and export terminals remain on the receiving end of Kviy's drones,
In response, Russia escalated its own strikes. On March 22, the Russian Defence Ministry said it had hit "key facilities within Ukraine's fuel and energy sector, as well as sites used for the preparation and launch of long-range unmanned aerial vehicles," Xinhua reported.
US: EXPLOSION PUTS PORT ARTHUR REFINERY IN TEXAS OUT OF ACTION
While the US mainland remains far from active conflict zones, it is not immune from the occasional catastrophic accident.
On March 23, explosions and fires tore through the Valero operated refinery in Port Arthur, Texas. Authorities described it as an industrial accident involving a diesel hydrotreater unit, with no injuries reported, according to Reuters and AP.
A hydrotreater uses hydrogen to remove sulphur from fuels to meet environmental standards. The facility, which employs about 770 workers, can process roughly 435,000 barrels of oil per day, converting heavy crude into petrol, diesel and jet fuel. It is among the few select refineries in the US, according to reports, that can process Venezuelan crude.
Though not linked to geopolitical conflict, the blaze forced a temporary shutdown of one of the largest refineries in the US, disrupting fuel production. Reuters reported that the entire facility had been taken offline.
The disruption comes at a time when US crude exports, particularly to India, have been rising sharply. The US exported about 357,000 barrels per day (bpd) of crude to India in February this year, according to ship-tracking data from Kpler, up from roughly 221,000 bpd last year. India has indicated that its energy purchases from the US could rise to $25 billion in the near future, from $15 billion last year. Around 80% of these exports consisted of light sweet West Texas Intermediate (WTI)-Midland crude, reflecting strong Indian demand for US grades.
GLOBAL OIL MARKETS RATTLED, BRENT ABOVE $100 A BARREL
These overlapping shocks have rattled global markets, triggering sharp volatility in oil and gas prices. Following the Gulf strikes between March 18 and 20, Brent Crude briefly surged to $119 per barrel before settling between $108 and $116, up from roughly $70 to $73 before the war. An 11% dip followed Trump’s claim of outreach to unnamed Iranian interlocutors, but prices quickly rebounded back to $102 on Tuesday.
Reuters highlighted warnings of prolonged LNG shortages after Iranian strikes caused "extensive damage" and "sizable fires" at Ras Laffan. QatarEnergy confirmed that two LNG trains were hit, knocking out 17% of the country’s export capacity, roughly a fifth of global LNG supply, for 3 to 5 years, with estimated annual losses of $20 billion.
The New York Times reported that repeated attacks could make it "much harder for Persian Gulf countries to rebuild," raising fears of multi-year disruptions to oil and LNG flows through the Strait of Hormuz, which carries about 20% of global oil supply.
The Energy Agency has called the crisis "the largest supply disruption in the history of the global oil market," with flows reduced to a trickle and an estimated shortfall of 8 million barrels per day in March.
With conflicts in both the Middle East and Ukraine continuing, analysts warn of sustained pressure on global energy security and rising inflation risks. Without urgent diplomatic de-escalation to protect critical infrastructure, a prolonged energy crisis seems more and more inevitable. As columnist and satirist Kamlesh Singh noted, "None of this happens on one day. The pain compounds. Slowly. Then faster. The frog is just getting comfortable as the water just got a tad warmer. The boiling point ain't far."
- Ends
(With inputs from Meenal Sharma)
Published By:
Shounak Sanyal
Published On:
Mar 25, 2026 09:16 IST
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