Oslo: Repair and restoration costs for energy-linked infrastructure damaged in the Middle East war could reach as much as $58 billion, Rystad Energy reported, indicating that oil and gas facilities may account for up to $50 billion of the total expenses.
According to Anadolu Agency, the consultancy estimated that total repair and restoration spending across affected energy-linked facilities ranges between $34 billion and $58 billion, with an average estimate of $46 billion. This includes approximately $5 billion for industrial, power, and desalination assets. Rystad Energy noted that the ongoing conflict poses a significant challenge to the global energy supply chain, as rebuilding efforts will compete for the same equipment, contractors, and logistics capacity already committed to LNG and offshore projects initiated since 2023.
Karan Satwani, senior analyst for supply chain research at Rystad Energy, emphasized in the report that repair work does not create new capacity but redirects existing capacity. This shift could delay projects and add inflationary pressure beyond the Middle East. The estimate marks a considerable increase from Rystad's initial $25 billion projection published three weeks ago, reflecting a broader damage footprint after continued strikes before hostilities largely subsided with the announcement of a two-week ceasefire between the US and Iran on April 8.
The consultancy highlighted that the primary constraint on recovery is not financing but access to long-lead equipment, specialist contractors, and logistics networks. Recovery timelines are expected to vary across different countries and asset types. Downstream refining and petrochemical assets are projected to account for the largest share of expected repair costs, followed by midstream and upstream facilities. Overall oil and gas repair costs are anticipated to be between $30 billion and $50 billion, while non-hydrocarbon assets such as power stations, desalination plants, aluminum smelters, and steel facilities may add another $3 billion to $8 billion.
Rystad Energy stated that Iran and Qatar are likely to bear the heaviest burden. Iran, having the highest number of affected facilities, may face repair costs potentially reaching $19 billion in a high-damage scenario. The damage includes gas processing, petrochemicals, refineries, fuel storage, and export infrastructure. Sanctions-related restrictions on Western contractors and equipment are expected to prolong restoration efforts.
In Qatar, damage is more concentrated but technically more complex, primarily affecting Ras Laffan Industrial City. Several LNG trains were impacted along with disruptions at the Pearl gas-to-liquids facility. Rystad noted that repair work in Qatar might overlap with QatarEnergy's North Field expansion, drawing on similar engineering teams, fabrication yards, and site crews, potentially slowing progress on expansion projects.
On Monday, Fatih Birol, the Executive Director of the International Energy Agency (IEA), stated that more than 80 energy facilities in the Middle East have been damaged since the war began on February 28, with over one-third classified as severely or very severely hit. Birol mentioned that restoring regional energy supply to pre-crisis levels could take up to two years, highlighting the extent of disruption across the region's oil and gas systems.