Estimates to restore war‑damaged energy infrastructure in the Middle East have doubled since March, reaching as much as $58 billion—but rising costs are only part of the challenge. The greater threat is the long‑term disruption to global energy supply chains, as capital is diverted to reconstruction, project schedules slip, and the industry’s ability to add new capacity globally comes under strain.
“Repair work does not create new capacity, it redirects existing capacity, and that redirection will be felt in project delays and inflation far beyond the Middle East,” Rystad Energy’s senior analyst for supply chain research Karen Satwani said in a recent market update.
“This is no longer just a story about damaged facilities in the Gulf, it is a stress test for the global energy supply chain,” she continued. “The same equipment and contractors needed to rebuild are already committed to a wave of LNG and offshore projects sanctioned since 2023.
“The $58 billion bill is the headline, but the knock-on effects on energy investment timelines globally may prove just as significant,” Satwani said.
Double the Damage
In March, Rystad Energy published an initial war-related repair estimate of $25 billion across Gulf energy infrastructure. Three weeks later, that estimate more than doubled, as military strikes continued in the region leading up to an 8 April ceasefire.
Estimates of the cost of repairing energy-linked facilities now range between $34 billion and $58 billion with the lower figure assuming that facilities yet to be fully assessed can be repaired using spare parts, modular equipment, and purchases with short procurement cycles, according to Rystad.
Of the $58 billion total, oil and gas facilities account for $30 billion to $50 billion, while nonhydrocarbon infrastructure such as aluminum smelters, steel plants, power stations, and desalination facilities adds another $3 billion to $8 billion, the report noted (Fig. 1).
Higher-end estimates reflect structural damage across major facilities whose critical systems require new equipment that can only be procured under long lead times and with conflict-related premiums attached to engineering, procurement, and construction (EPC) contracts, Rystad said. Examples include war-risk insurance, delays in deploying contractors, logistics issues, and restricted access to international supply chains.
Divergent Recovery Timelines
As the extent of the damage grows, access to equipment, contractors, and logistics becomes the key limiting factor as timelines for recovery diverge across assets and countries, given domestic execution capacity and access to supply chains.
Operators will naturally want to restore existing production before moving forward with greenfield developments.
If contractors are already on-site, operations can resume in as little as a week if only surface equipment and modular repairs are needed, Rystad analysts point out. But if a facility’s core process units require reconstruction or equipment orders on long-lead times, repairs may take years.
Downstream Hit the Hardest
Downstream refining and petrochemical assets have suffered the most damage because of their complexity and the extent to which they were impacted in more recent stages of the war, according to Rystad.
Midstream and upstream assets follow, while wells and industrial infrastructure contribute smaller but still material portions. This includes well intervention costs to restore damaged upstream assets (Fig. 2).
Iran and Qatar Bear the Brunt of Damage
At a country level, Iran has the highest number of affected facilities and the widest spread across asset types, with repair costs estimated to reach up to $19 billion, assuming a high-damage scenario.
Major disruptions are concentrated in the South Pars onshore gas processing facilities at Asaluyeh, along with the adjacent Pars Special Economic Energy Zone and Mahshahr petrochemical complex, significantly impacting Iran’s gas processing and downstream petrochemical capacity.
Damage to key refineries, fuel storage depots in the Tehran region and export infrastructure at Lavan and Siri Island constrain domestic fuel distribution and reduce export flexibility, thus affecting Iran across the value chain from processing to refining, storage, and exports.
Because access to Western EPC contractors, original equipment manufacturers, and process technologies is restricted, operators face narrower options and extended procurement cycles.
Qatar: A Smaller Front, but a Deeper Technical Test
Qatar presents a different profile, where the impact is more concentrated but significantly deeper in terms of technical complexity.
Damage is centered on the Ras Laffan Industrial City, where multiple liquefied natural gas (LNG) trains are affected, along with the Pearl GTL facility.
This, in turn, affects QatarEnergy’s ongoing North Field expansion program, including the latest award to a consortium led by TechnipEnergies, with contractors already active across multiple project phases, enabling overlap between expansion work and repairs within the same industrial cluster.
Both activities draw on similar pools of engineering teams, fabrication yards, and site crews, even if they do not always involve the same contractors. As a result, any capacity redirected toward repairs is likely to cause delays of only a few months, with minimal impact on overall project schedules.