Middle East conflict continues to disturb the global energy market! Abu Dhabi's largest natural gas processing plant was attacked and caught fire, causing it to shut down again. Israel's largest gas field has resumed production.

On April 3rd, local time, the natural gas facility in Habshan, the United Arab Emirates, was temporarily closed after a fire broke out. This is the second time the natural gas facility has been closed since the outbreak of the Middle East conflict at the end of February. The media office in Abu Dhabi, UAE, confirmed that the fire at the Habshan natural gas facility was caused by debris falling from intercepted missiles. The Habshan natural gas facility is the largest natural gas processing plant in Abu Dhabi and one of the most important energy infrastructure in the UAE. The facility is responsible for natural gas processing and transportation functions. In addition, Habshan also has oil facilities and serves as the starting point for a crude oil pipeline leading to Fujairah, an important port outside the Strait of Hormuz. However, Israel's largest natural gas field resumed production after a 33-day shutdown due to the war, which may provide some relief to the market under pressure from tight supplies. A spokesperson for Newmed Energy, a shareholder of the Leviathan gas field project, stated that the Leviathan gas field project has now resumed supply to the domestic market and exports. The previous day, the Israeli Ministry of Energy had announced that the gas field was about to resume operations. The Leviathan gas field is a large natural gas field located in the eastern Mediterranean, operated by Chevron Corporation (CVX.US), which is crucial for meeting Israel's domestic needs and is also an important source of natural gas for Egypt. Since the outbreak of the Middle East conflict on February 28th, Israel had ordered the temporary closure of some natural gas fields for security reasons. This further exacerbated the tense global supply situation, as the war had disrupted ship traffic through the Strait of Hormuz, and missile attacks had also damaged Qatar's largest liquefied natural gas plant. Another Israeli gas field named Karish was also ordered by the government to close after the outbreak of the war and has not yet resumed production. As of the time of writing, European natural gas futures prices were reported at 50.08 euros per megawatt hour. Middle East energy infrastructure frequently targeted As the Middle East conflict continues to escalate, the targets of attacks have expanded from military bases to energy infrastructure. Just hours before the fire at the Habshan natural gas facility, Kuwait's Mina Al-Ahmadi refinery was also attacked, causing equipment in operation to catch fire. Authorities also stated that a power and desalination plant were attacked early Friday morning, causing damage to some equipment. In March, the Shah gas field, a large natural gas field in the United Arab Emirates, was attacked by drones, causing a fire and halting operations. The gas field is one of the largest natural gas fields in the UAE and is jointly operated by the Abu Dhabi National Oil Company and the US Occidental Petroleum Corporation. The Ras Laffan Industrial City in Qatar's liquefied natural gas facility also suffered heavy damage last month, with 2 out of 14 production lines severely damaged, resulting in a loss of about 17% of liquefied natural gas export capacity, equivalent to a reduction of 12.8 million tons per year. The International Energy Agency (IEA) had warned last month that the scale of destruction caused by the Middle East conflict to the global energy supply chain is unprecedented, and the repair process will be lengthy. The IEA stated that the Middle East conflict had led to over 40 energy facilities in nine countries being "severely or extremely seriously" damaged, and that the restoration of oil fields, refineries, and pipelines will take a considerable amount of time. This impact is akin to the combined effects of the two major oil crises in the 1970s and the natural gas crisis sparked by the Russia-Ukraine conflict in 2022. For the global energy market already facing supply shortages, the only short-term solution lies in reopening the Strait of Hormuz. Although the Middle East conflict is ongoing, there have been reports of the possibility of partial navigation in the Strait of Hormuz. It was reported that Iran and Oman are drafting an agreement aimed at implementing "transit supervision" for ship transportation through the Strait of Hormuz, without restricting vessel passage. Market participants believe that progress on the Omani side brings new hope that the Strait of Hormuz may partially reopen without relying on military means. Looking ahead, the scale of damage to energy facilities in the Middle East implies that even after the conflict ends, the normalization of the global energy supply chain will be a lengthy process.