(Bloomberg) — Iran and Israel have exchanged strikes targeting critical energy infrastructure across the Middle East, heightening supply risks as the conflict approaches its third week.

Qatar’s Ras Laffan Industrial City — home to the world’s largest liquefied natural gas (LNG) export complex — sustained “extensive damage” following an Iranian attack, according to QatarEnergy. The facility is a key hub for global LNG exports.

The strike followed warnings from Tehran that energy assets across the Gulf could become “legitimate targets” after Israeli forces hit Iran’s South Pars gas field, the world’s largest. Facilities in Qatar, Saudi Arabia and the United Arab Emirates are now considered at elevated risk.

The escalation signals a shift toward direct targeting of upstream and processing infrastructure, raising the likelihood of broader supply disruptions. South Pars plays a central role in Iran’s gas supply and industrial activity, and any sustained damage could impact domestic energy availability.

At the same time, tanker traffic through the Strait of Hormuz — a critical route for roughly one-fifth of global oil and a significant share of LNG trade — remains severely constrained. Limited vessel movement continues, but overall flows have dropped sharply amid security concerns.

Crude prices have surged in response, with Brent nearing $110/bbl and U.S. crude trading close to $100. The market has been driven by both physical supply disruptions and heightened geopolitical risk.

The conflict is also beginning to affect regional energy systems. Iraq reported reduced power generation after Iranian gas flows were curtailed, highlighting the interconnected nature of supply across the region.

Despite the escalation, some export activity continues. Iranian crude shipments from Kharg Island appear largely uninterrupted, and some Gulf producers are attempting to reroute exports where possible.

However, the concentration of key oil and gas infrastructure across the region — including Ras Laffan, South Pars and major export terminals — leaves global supply increasingly exposed to further disruption if attacks intensify.

U.S. officials are weighing measures to stabilize markets, including emergency oil stock releases and efforts to restore secure passage through the Strait of Hormuz. The timeline for reopening the waterway remains uncertain.

With both sides signaling continued military operations, the risk to global oil and LNG supply remains elevated, with infrastructure security and shipping access emerging as the key variables for markets in the weeks ahead.

Map source: Global Energy Infrastructure.