The war in the Middle East looks set to pose a significant risk to the global economy, with drone attacks near oil refineries in Saudi Arabia and Kuwait on Monday indicating that Iran is targeting major energy infrastructure.
Issued on: 02/03/2026 - 14:20Modified: 02/03/2026 - 19:28
With world markets already rattled by fighting in the Middle East and oil prices soaring, Saudi Arabia’s Ras Tanura oil refinery came under attack Monday from Iranian drones, with defences downing the incoming aircraft, a military spokesman said on the state-run Saudi Press Agency.
Even successfully intercepted drones cause debris that can spark fires and injure those on the ground and online videos from the site, near the city of Dammam in eastern Saudi Arabia, appeared to show thick black smoke rising after the attack.
One of the world's largest refineries, with a capacity over half a million barrels of crude oil a day, was temporarily shut down as a precaution, Saudi state television reported.
Earlier in the day, more debris fell on Kuwait's Ahmadi oil refinery, injuring two workers, after drones were shot down, the state-run KUNA news agency said.
The attacks by Iran on major regional oil infrastructure add a new element to the war gripping the Middle East, directly targeting the lifeblood of the area's economy.
“It’s a really worrying signal. So far, we haven’t seen energy infrastructure being targeted,” Jorge Leon senior VP and head of geopolitical analysis at energy research and business intelligence company, Rystad Energy told FRANCE 24.
Read moreOil prices surge as tanker traffic in Strait of Hormuz grinds to a halt
“The longer this disruption goes on for the higher oil and gas prices we will see in the coming days and weeks.”
Why is Iran targeting energy infrastructure?
The attacks on Monday came as the war in the Middle East expanded on multiple fronts.
Strikes by Israel and the US were happening in Iran, and Israeli forces were hitting targets in southern Lebanon while attacks from Iran and Iranian-backed militias hit Israel and Arab states.
Read moreIsraeli strikes kill dozens in Lebanon as Hezbollah launches attack after Khamenei's death
A senior Iranian official signalled that there would be no negotiations with the United States, and the Iranian Red Crescent Society said at least 555 people have been killed so far in the Islamic Republic.
Iran’s goal in hitting energy infrastructure is to “cause global backlash and impose costs" on the US president, Sascha Bruchmann, a defence analyst with the International Institute for Strategic Studies in Bahrain, told The Associated Press.
“Gulf energy infrastructure [is] now squarely in Iran’s sights,” added Torbjorn Soltvedt, an analyst at the risk intelligence company Verisk Maplecroft.
“An extended period of uncertainty lies ahead as Iran seeks to impose a heavy economic cost by putting tankers, regional energy infrastructure, trade routes and US security partners in the crosshairs.”
Meanwhile, a source close to the Saudi government told AFP that a "concerted" Iranian attack on oil facilities could trigger a military response.
The Gulf militaries have so far not hit back against Iran.
How does the conflict impact oil shipping?
The strikes could rattle global markets, particularly if Iran makes the Strait of Hormuz unsafe for commercial traffic.
The Strait of Hormuz is a narrow waterway flanked by the Iranian coastline which carries 20% of the world’s oil.
Iran has been threatening ships in the Strait of Hormuz and at least three oil tankers sailing near the Strait came under fire on Sunday, raising questions over whether the critical energy chokepoint will become non-operational.
Read moreWar in Middle East: Tensions rise over Strait of Hormuz as tankers caught in crossfire
Shipping companies have already suspended their vessels’ traffic through the Suez Canal over security concerns.
The impact on the global economy could be extreme. “Disruption in the Straight of Hormuz could reach ten million barrels per day,” said Leon. “That’s 10 percent of consumption. This really highlights the importance of the current crisis.”
In the short term, most countries have oil reserves that will buffer the impact of any shortfall.
"However if this war does continue as long as US President Donald Trump suggests – three or four weeks – there will definitely be a situation where the price of oil will skyrocket which will have adverse impacts on the global economy and more locally for the US," Arang Keshavarzian, professor of Middle Eastern and Islamic Studies at New York University, told FRANCE 24.
Even so, analysts say completely blocking the Strait would hurt Iran too since all of its 1.6 million barrels per day passes through the waterway, most of which goes to China where refineries are less concerned about US sanctions that prevent Iran from selling its oil elsewhere.
Are attacks on energy infrastructure impacting supplies?
The Strait of Hormuz, which is the only sea passage from the Persian Gulf to the open ocean, is also a major channel for exports of liquified natural gas (LNG) – gas which has been cooled to liquid form to make it easier to transport.
Qatar, one of the world's biggest LNG exporters, on Monday suspended production after two attacks on facilities in Ras Laffan Industrial City and Mesaieed Industrial City run by QatarEnergy, one of the world's biggest LNG producers.
The announcement caused European natural gas prices to rocket more than 50 percent, as world crude futures surged nearly 9% on fears of disruption to supplies.
But the European Commission said it does not expect the widening conflict in the Middle East to have any immediate impact on the European Union's security of oil and gas supplies.
Europe has increased imports of LNG as it seeks to phase out Russian gas but the US is by far its main supplier providing 58% of EU LNG last year, while Qatar provided 6% in the last quarter.
However, a block on shipping will in time impact deliveries of food and essential supplies to Gulf countries such as Dubai, Doha, Abu Dhabi and Kuwait.
"These countries are highly dependent on imports of basic goods – fruit, vegetables, other supplies – and that primarily is delivered via ships going through the Strait of Hormuz," Keshavarzian said.
Travel and stock market disruption
The ongoing conflict has also caused widespread travel disruption with tourists and business travellers stuck unexpectedly in hotels, airports and on cruise ships, with no word on when many airports would reopen or when flights to and through the Middle East would resume.
Shutdown airports in Dubai, Abu Dhabi and Doha – including Dubai International Airport, one of the busiest in the world – are important hubs for travel between Europe, Africa and the West to Asia. All three were directly hit by strikes.
Disruption has taken a toll on the travel sector with shares in global airlines United, Delta and American all sliding 5% to 6% and global hotel chains tumbling. Cruise lines like Carnival fell even harder.
Meanwhile the United Arab Emirates is shutting the country’s main stock exchanges for the start of the trading week as the regional war intensifies.
The country’s Capital Market Authority said the Abu Dhabi Securities Exchange and Dubai Financial Market would be closed Monday and Tuesday.
(FRANCE 24 with AP and AFP)
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