$25 billion price tag looms over Gulf energy infrastructure repairs, Rystad says

March 25, 2026, by Melisa Cavcic

Given the reported damage and shutdowns impacting liquefied natural gas (LNG) assets, refineries, fuel terminals, and gas-to-liquids facilities across the Middle East region amid the military conflict between the U.S.-Israel alliance and Iran, Rystad Energy, an energy market intelligence group, estimates that the Gulf energy infrastructure has the potential to be saddled with $25 billion in repair costs.

Ras Laffan petrochemicals project in Qatar (aerial view); Source: CPChem

After the war in the Middle East triggered severe global supply disruptions in oil and gas, Rystad Energy’s estimates show that the energy infrastructure repair and restoration bill to date could reach at least $25 billion, based on an initial assessment of impacted facilities. However, these costs are expected to rise further, with spending likely to be driven primarily by engineering and construction, followed by equipment and materials.

While assessing repair costs and full restoration timelines across severity tiers, the company claims that one clear outlier emerges in Qatar’s Ras Laffan Industrial City, where the destruction of LNG trains S4 and S6 has led to force majeure and a 17% capacity reduction, equivalent to about 12.8 million tonnes per annum (mtpa).

Audun Martinsen, Head of Supply Chain Research at Rystad Energy, highlighted: “The Gulf region’s recovery will be defined less by financial capital and more by structural constraints. While some assets may be restored within months, others could remain offline for years. Beyond the status of the Strait of Hormuz, every day of damaged or shut-in infrastructure pushes pre-war production capacity further out of reach.

“Iran’s South Pars offshore field and Qatar’s Ras Laffan facility stand out as particularly concerning cases. The scale of damage and long lead times for critical equipment could result in slow recovery at Ras Laffan, while Iran’s legal exclusion from Western supply chains means it will have to rely on Chinese and domestic contractors, which is a technically feasible approach that could be slower and more expensive. Urgent repairs will have to take precedence in place of planned expansion.”

The firm is adamant that capital alone will not be sufficient to restore the facility, with a full recovery taking up to five years due to the large-frame gas turbines required to power LNG main refrigeration compressors being supplied by only three original equipment manufacturers (OEM) globally, all of which entered 2026 with production backlogs of around two to four years, driven by demand from data center electrification and coal plant retirements.

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Rystad emphasized: “Looking beyond Qatar, neighboring Bahrain represents another distinct disruption scenario. The BAPCO Sitra Refinery was struck twice, causing confirmed damage to two crude distillation units (CDU) and a tank farm, with force majeure declared across group operations. Here, the constraint is not equipment shortages or sanctions, but the timing of the damage relative to the asset’s investment cycle. The facility had just reached mechanical completion under its $7 billion modernization program in December last year, with engineering, procurement and construction (EPC) contractors still onsite finalizing ramp-up obligations when the attacks occurred.

“The destruction of a newly commissioned CDU block just months after first production has eliminated novel processing capacity, delaying the revenue intended to support the recent investment. Restoring the units will likely require international contractors to be re-mobilized at conflict-inflated costs and under uncertain war-risk insurance, as the damaged assets had only recently come online.”

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The company also mentions moderate-to-minor disruptions in other countries, including the UAE, Kuwait, Iraq, and Saudi Arabia, with recovery at all impacted facilities being shaped by the density and proximity of the domestic EPC ecosystem surrounding each asset. Saudi Aramco’s rapid restart at Ras Tanura, where maintenance teams were already on site for a planned turnaround when debris fell inside the perimeter, is seen as the clearest example of the advantages enabled by deep domestic capability.

Rystad concluded: “The speed of recovery in the region will depend on execution capacity and capital deployment timing, as repair spending ramps up. Operators are likely to prioritize restoring existing fields instead of new developments, creating demand for EPC contractors and OEMs, especially those with regional experience and existing agreements with national oil companies.

“Near-term work will most likely focus on inspection, engineering and site preparation, followed by equipment replacement and construction as procurement constraints ease. In Iran, continued sanctions would limit access to Western contractors and technology, leaving domestic and East Asian players to capture most recovery-related activity.”