Reuters Opinion: Iran May Cause Widespread Damage to Gulf Energy Infrastructure if US Launches Ground Offensive

On March 30, Clyde Russell, a columnist for Reuters on commodities and energy, stated that after a month of US and Israeli strikes against Iran, the global supply markets for crude oil, refined products, and liquefied natural gas are in a ‘second worst scenario.’ The article predicts the worst-case scenario of the current conflict: a dramatic escalation where Iran uses missiles and drones to inflict widespread damage on the Gulf region’s energy infrastructure, including pipelines, refineries, processing facilities, and export terminals. The most likely trigger for such actions would be US ground forces attempting to seize and control territory held by Iran, such as the Khark Island oil terminal and several small islands in the Strait of Hormuz. Deploying ground troops is reportedly an option being considered by President Trump, and US military forces are continuously gathering in the region. However, even if a military invasion is tactically successful, it would become meaningless if it leads to large-scale destruction of energy infrastructure, as this would push an already severe market crisis into an unprecedented global energy disaster. Looking at Brent crude futures, the market is still largely betting that the situation will cool down and that normal transportation through the Strait of Hormuz will eventually resume. On Monday morning in Asia, Brent futures rose by 2.7%, trading at about $115.55 per barrel, up from $112.57 at the close on March 27. Since closing at $72.48 per barrel on February 27, the day before the US and Israel launched attacks on Iran, Brent prices have increased by 59%.