Rystad Energy has significantly revised its estimate for the cost of repairing Gulf oil and gas infrastructure damaged during the recent Iran war, lowering the figure to approximately $40 billion from an earlier projection of $58 billion. This substantial reduction is attributed to damage proving less severe than initially anticipated and a faster-than-expected progression of repair efforts across the region.
Faster Recovery for Conventional Infrastructure
The quickest progress in restoration has been observed in conventional refining and pipeline networks. Rystad Energy notes that facilities such as Saudi Arabia’s East-West pipeline are recovering rapidly, with some already operating at near full capacity. The SATORP refinery at Jubail is also slated to begin a gradual recovery by late in the fourth quarter, with a larger ramp-up expected in the first quarter of 2027. This accelerated pace is largely due to the work involving established equipment and processes, allowing specialist contractors to execute repairs relatively quickly.
LNG Facilities Face Prolonged Outages
In contrast, the restoration of complex Liquefied Natural Gas (LNG) infrastructure is proving considerably more challenging and time-consuming. Qatar, for instance, has 12.8 million tonnes per annum (Mtpa) of LNG capacity sidelined, with repairs potentially extending over three years. The intricate nature of liquefaction trains makes them significantly more difficult to rebuild compared to conventional oil infrastructure. This disparity in recovery timelines is expected to have important implications for global energy markets, potentially keeping gas markets tighter for longer even as crude transportation capacity returns more quickly.
Adapting to Persistent Threats
The ongoing repair efforts are also prompting Gulf energy companies to re-evaluate their infrastructure resilience strategies. Rystad Energy reports that operators are increasingly preparing for the possibility of repeated attacks, rather than treating infrastructure damage as a one-off event. Saudi Aramco is establishing a standing emergency contractor system, with long-term agreements designed to allow repair crews to mobilize within days following an attack. Similarly, ADNOC has indicated that it has robust response protocols in place. This shift could lead to more stable, long-term relationships between energy producers and contractors, focused on the rapid deployment of equipment, workers, and specialist teams.
Remaining Risks and Future Outlook
Despite the improved repair estimates, the region still faces considerable risks. Houthi strikes on key sites like Rabigh and Jazan continue, posing a threat of fresh damage. Logistical constraints, such as the limited loading capacity of Yanbu’s terminals (around 4.5-5 mb/d), could also impact crude export volumes even as pipeline systems return to full operation. The critical uncertainty for energy markets is therefore shifting from the scale of the initial damage to whether the Gulf’s repair capacity can consistently outpace continued attacks. While oil infrastructure may normalize quicker if repairs consistently exceed new damage, LNG facilities are likely to remain a significant concern due to their much longer restoration timelines.