Middle East energy exports are in chaos as the U.S.-Israel conflict with Iran halts oil and LNG production from Iraq, Qatar, and Saudi Arabia, while the Strait of Hormuz remains closed, disrupting roughly 20% of global supply. Countries like China, India, and Indonesia scramble to secure alternative sources amid rising fears of a prolonged energy crisis.

FACTBOX: US-Israeli war on Iran causes major oil, gas disruptions

March 04, 2026

Ahmad Ghaddar/Reuters

3D-printed oil pump jacks and an Iranian flag appear in this illustration taken March 2, 2026.

Dado Ruvic/Illustration/Reuters

The U.S.-Israel war on Iran has disrupted oil and natural gas exports from the Middle East and forced production stoppages from Qatar to Iraq.

Below are the main energy disruptions so far.

PRODUCTION SHUTDOWNS

OPEC's second-largest producer, Iraq, slashes output: Iraq has cut nearly 1.5 million barrels per day - about half of its output - due to storage limits and the lack of an export route, officials told Reuters. They said the country may have to shut 3 million bpd, nearly all of its output, within days if exports do not resume.

QatarEnergy LNG halted: Qatar stopped operations at its LNG facilities on Monday, affecting some of the world's largest plants and a source that supplies about 20% of global LNG. QatarEnergy also suspended parts of downstream output on Tuesday.

Saudi disruptions: Saudi Arabia, the world's top oil exporter, suspended output at its 550,000 bpd Ras Tanura refinery and has begun rerouting crude loadings from eastern ports to Yanbu on the Red Sea.

Other outages: Israel and Iraq's Kurdistan region also curtailed parts of their oil and gas production.

There was also a fire caused by debris at the UAE's Fujairah port, a key global oil storage and bunkering hub.

SHIPPING

Strait of Hormuz: traffic through the Strait was closed for a fourth day after Iran attacked five ships, choking off a key artery accounting for about 20% of global oil and LNG supply.

Iran declares the Strait closed: A senior Iranian Revolutionary Guards official said on March 2 that the Strait of Hormuz is closed and warned Iran would fire on any ship attempting to pass.

War risk insurance cancelled: Major marine insurers are cancelling war-risk coverage for vessels operating in Iranian, Gulf and adjacent waters.

IMPACT ON CONSUMERS

China cuts refinery runs: Chinese refiners are shutting crude units or advancing planned maintenance due to disrupted crude flows.

India seeks alternatives: India is looking for substitute sources of crude, LPG and LNG to prepare itself if the crisis extends beyond 10–15 days, a government official said.

Indonesia shifts sourcing: Indonesia plans to increase U.S. crude imports to offset reduced Middle East supply.

-Ahmad Ghaddar/Reuters