RBC: Iran War Threatens Red Sea Flows and Gulf Infrastructure - FJElite

The Iran war is entering a more dangerous phase as the Houthis target tankers in the Red Sea, and Iran continues striking desalination plants and other critical infrastructure across the Gulf. At the same time, Ukrainian attacks in the Black Sea are threatening regional exports, including Kazakh crude through the CPC, while Europe is heading toward winter with its lowest gas storage levels since the 2022 energy crisis and facing greater competition for limited LNG supplies.

Brent has already risen more than 30% since July 1, but prices may still understate the pressure building across the region. A sustained Houthi campaign could reduce the effectiveness of Saudi Arabia’s East-West pipeline route, while alternative shipping through the Suez Canal would be slower and more expensive, particularly for fully loaded VLCCs. In a full regional war, oil could challenge the 2022 high near $128 a barrel or even the 2008 peak around $146.

The attacks on desalination plants are especially serious because Gulf states rely heavily on them for drinking water, with Kuwait around 90% dependent. Some major cities may have only about seven days of clean water if key facilities are disabled. Data centres are also becoming more exposed as potential targets because of their importance to both Gulf economies and US strategic interests.