JPMorgan has quantified the impact of the Gulf energy conflict for the first time: more than 60 infrastructure sites have been hit by drone and missile attacks, forcing a halt to approximately 2.4 million barrels per day of refining capacity. Of this, 900,000 barrels per day can be restored within weeks, 800,000 barrels will take about a month, while repairs to the remaining 700,000 barrels per day of capacity may require several years.
According to the Storm Chasing Trading Desk, JPMorgan's commodities research team released a report on April 9th, providing the first hardcore quantification of energy infrastructure damages in the Gulf region conflict.
At a time when markets are often swayed by vague 'attack' headlines, this report offers professional investors a key benchmark for assessing substantive supply shocks.
Damage Reality: Over 60 Assets Impacted
Nearly six weeks into the conflict, the destruction inflicted on infrastructure has been significant. The report highlights:
"In conflicts, headlines often focus on the fact of destruction rather than the scale. Facilities 'hit,' infrastructure 'targeted'... but we rarely receive quantifiable and qualitative data that truly matter to the market.
What we do know is that in the nearly six weeks since the conflict began, more than 60 Gulf energy infrastructures have been affected by drone and missile attacks, with about 50 suffering varying degrees of damage."
Although most attacks did not result in long-term disruptions, at least eight assets were severely damaged, facing lengthy repair periods. For instance, restoring 17% of Qatar’s Ras Laffan oil and gas complex capacity could take years, while Bahrain's Sitra refinery was struck twice.
Refinery Blow: 2.4 Million Barrels Per Day Capacity Shutdown
The crude refining sector bore the brunt of this conflict. It is estimated that around 20 affected refineries were forced to shut down approximately 2.4 million barrels per day of capacity.
While most facilities went offline as a precaution or have restarted, recovery timelines remain varied: about 900,000 barrels per day can be restored within weeks, another 800,000 barrels per day will require about a month; the remaining roughly 700,000 barrels per day (mainly concentrated in Bahrain’s Sitra and Iran’s Tehran refineries) are bound to need longer repairs.
Saudi Arabia Declares: From 'Incidental Disruptions' to 'Substantive Impact'
What truly alerted the market was the full extent of the damage disclosed by Saudi authorities. As multiple core facilities across upstream, midstream, and downstream sectors in Saudi Arabia (including pipelines in the east and west, as well as the Manifa and Khurais oil fields) were confirmed to have been attacked, the nature of the incident has fundamentally changed. JPMorgan commented on this, stating:
"Saudi Arabia’s statement today materializes the disruption and shifts the narrative from incidental interruptions to a measurable supply shock."
Particularly striking was the attack on the eastern and western pipeline pump stations just hours after the announcement of a ceasefire, which directly resulted in a loss of throughput amounting to 700,000 barrels per day. Considering that this pipeline is a critical bypass channel for the daily flow of approximately 5 million barrels of crude oil, the implications of the damage to this strategic node are extremely far-reaching.
Editor/Lee