Gulf war repair bill cut to $40 billion from $58 billion: Rystad Energy

The estimated cost of repairing Gulf oil and gas infrastructure damaged during the Iran war has fallen to about $40 billion, down from Rystad Energy’s April estimate of $58 billion, as some facilities have proved less damaged than initially thought and repair work has progressed faster.

Rystad Energy, cited by Bloomberg, said recovery has been quickest across conventional refining and pipeline infrastructure, while more complex LNG facilities face much longer repair timelines.

Saudi Arabia’s East-West pipeline is already operating at around 5.8 million barrels per day (mb/d) and should reach full capacity within weeks, Rystad said. The pipeline is a key route for moving Saudi crude from its eastern production areas to the Red Sea.

The SATORP refinery at Jubail is expected to begin a gradual recovery from late in the fourth quarter, with a larger ramp-up expected in the first quarter of 2027.

Conventional infrastructure recovering faster

Rystad said repairs have progressed fastest in conventional refining and pipelines because the work largely involves established equipment and processes such as steelwork, pumps and welding, which specialist contractors can execute relatively quickly.

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LNG infrastructure is proving considerably more difficult to restore.

Qatar has 12.8 million tonnes per annum (Mtpa) of LNG capacity sidelined, with repairs potentially taking three years, according to Rystad. Liquefaction trains are significantly more complex to rebuild than conventional pipelines and refinery infrastructure.

This difference in repair timelines could have important implications for global energy markets. While crude transportation and conventional refining capacity could return relatively quickly, prolonged outages at LNG facilities could keep gas markets tighter for considerably longer.

Gulf producers prepare for repeated attacks

The repair effort is also changing how Gulf energy companies approach infrastructure resilience.

Rystad Energy, as reported by Bloomberg, said operators are increasingly preparing for the possibility of repeated attacks, rather than treating infrastructure damage as a one-off event.

Saudi Aramco is setting up a standing emergency contractor system, with long-term agreements designed to allow repair crews to mobilise within days following an attack.

ADNOC has also said it has response protocols in place.

The shift could change the relationship between energy companies and contractors. Instead of relying mainly on one-off repair contracts following an incident, producers could maintain standing arrangements that allow equipment, workers and specialist teams to be deployed rapidly.

Gulf producers also have a strong incentive to restore infrastructure quickly as they seek to demonstrate that they remain reliable suppliers to global energy markets. Energy executives in the region have argued that the international community should share the costs arising from attacks and the wider war.

Recovery still faces risks

The faster repair estimates do not eliminate the risk of further disruption.
Rystad Energy said Houthi strikes on Rabigh and Jazan continue, potentially creating fresh damage even as existing facilities are being repaired.

There are also logistical constraints. Even if Saudi Arabia’s pipeline system returns to full capacity, Yanbu’s terminals can load only around 4.5-5 mb/d, limiting how much crude can ultimately be exported through the Red Sea route.

The key uncertainty for energy markets is therefore shifting from the scale of the initial damage to whether the Gulf’s repair capacity can keep pace with continued attacks.

If repairs consistently outpace new damage, oil infrastructure could return to normal faster than previously expected. LNG, however, is likely to remain the bigger concern given the much longer restoration timelines for liquefaction capacity.