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Iranian Attacks Hit Gulf Energy Infrastructure, Escalating Regional Conflict

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Key Points
  • Iranian attacks targeted energy facilities in Bahrain and Kuwait, causing fires and damage.
  • The strikes are part of retaliation for U.S.-Israeli actions that killed Iran's supreme leader.
  • Regional escalation includes incidents in Israel, UAE, Saudi Arabia, and broader conflicts.

Smoke was seen billowing above Bahrain International Airport on Thursday, with reports of an impact and large fire near the airport, possibly at a fuel depot. It remained unclear whether the tanks reportedly hit were part of the airport’s kerosene facilities or a different site. Bahrain's interior ministry released a video showing a large fire at a fuel tank storage facility in Muharraq Governorate, which it attributed to Iranian attacks. The ministry had earlier said a facility in the vicinity was targeted, and a witness told AFP they saw smoke rising from the area. Air defense systems were active over the city of Manama, and Bahrain reported on Wednesday that its military had intercepted over 170 drones and more than 100 missiles since Iran began targeting countries across the region. Bahrain is home to the U.S. Navy’s 5th Fleet headquarters, making it a repeated target of attacks since the start of the war, according to authorities.

In Bahrain, an Iranian missile struck the 405,000-barrel-per-day Sitra refinery operated by Bapco Energies on 5 March. According to Bahraini authorities, the strike caused a fire in a unit of the refinery, which is located on Sitra island south of the capital. The fire was later brought under control by firefighting teams, with Bahrain's National Communication Centre stating there are no reported injuries and refinery operations continue. Authorities have started assessing the damage to the BAPCO refinery, one of the most important energy facilities in the country, processing about 267,000 barrels of oil daily and key for fuel production and export in the Persian Gulf. A fire broke out at the BAPCO oil facility in Bahrain after an attack from Iran, according to Bahrain's Ministry of Interior, with limited damage reported but no casualties.

In Kuwait, the state-owned KPC reported that the building housing both its headquarters and the country's oil ministry was targeted by a drone in the early hours of 5 April, causing a fire. The attack on the KPC building caused significant material damage, according to the finance ministry, though the building had already been evacuated and no injuries were reported. Another strike in Kuwait targeted two power and water desalination plants, resulting in significant material damage and the shutdown of two electricity generation units, according to the ministry of electricity and water. This represents the third attack on Kuwait's power infrastructure in less than a week, based on research from three sources.

Elsewhere in the Gulf, Abu Dhabi's authorities responded to a fire at the Ruwais Industrial Complex after a drone attack, with officials saying the blaze broke out at one of the facilities within the industrial site following the strike. In the United Arab Emirates, a drone was shot down near the Al Dhafra Air Base, which hosts U.S. forces, and shrapnel fell to the ground, wounding six people, according to authorities. Saudi oil giant Saudi Aramco shut its 550,000-barrel-per-day Ras Tanura refinery on 2 March after debris from intercepted drones fell on the facility, which was targeted again on 4 March. The incidents come as Israel and Iran exchange strikes, with regional air defences activated across the Gulf.

In Israel, heavy black smoke rose over an industrial plant near Neot Hovav in southern Israel on Sunday after debris from an intercepted Iranian missile struck the site, causing a pesticide tank to catch fire and sending thick plumes into the sky. Officials said there were no injuries and no wider risk, though nearby areas were evacuated as crews worked to contain the blaze. A day later, a fire broke out at an oil refinery in Haifa, the second such incident this month, with footage showing flames and dark smoke from a storage tank before firefighters brought it under control. The cause was not confirmed, though on Monday, an oil refinery in Haifa, Israel was hit by debris from a missile, and it is still unclear who is behind the attack, leaving uncertainty about whether the Haifa refinery fire was a direct result of missile debris or had an unrelated cause.

The broader regional escalation includes Azerbaijan accusing Iran of attacking it with drones on Thursday, though Tehran denied that, while the U.S. said it sank an Iranian frigate in the waters off Sri Lanka on Wednesday. Israel issued a mass evacuation warning for all of Beirut's southern suburbs as fighting escalated with Lebanon's Iran-allied Hezbollah militants, and U.N. peacekeepers reported ground combat in southern Lebanon as more Israeli troops crossed the border. Israel announced multiple incoming missile attacks and air sirens sounded in Tel Aviv and Jerusalem, with the Israeli military saying it carried out a wave of strikes on Iran's ballistic missile launch sites.

The human toll of the conflict includes at least 1,230 people killed in Iran, more than 100 in Lebanon and around a dozen in Israel, according to officials in those countries, though the full casualty count across all affected countries remains unknown. Qatar evacuated residents near the U.S. Embassy in Doha, according to research from three sources, as the war has escalated each day, affecting an additional 14 countries across the Middle East and beyond.

Economically, Iran's shutdown of the Strait of Hormuz, which typically handles around 15mn b/d of crude supply, has pushed Iraq, Kuwait, Saudi Arabia and the UAE to either reduce production or shut in volumes entirely. Production from Iraq, Kuwait, Saudi Arabia and the UAE is estimated to have fallen by a combined 9.15mn b/d versus February levels, based on Argus assessments. The U.S. and Israel launched air strikes on Iran on 4 April, and before Tehran moved to block trade routes through the Strait of Hormuz, energy-linked facilities and installations across Mideast Gulf countries were hit by a new round of Iranian drone strikes overnight on 5 April.

In response, the eight core OPEC+ members scheduled to meet on 5 April to discuss May output policy have agreed on a production increase but are still discussing the volume, according to delegate sources. Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan agreed on 1 March to raise their collective crude production ceiling by 206,000 b/d in April, based on research from three sources, with the production increase part of a process the group began in April 2025 to unwind a large set of production cuts.

Internationally, the UN Security Council voted on Wednesday to approve a resolution demanding a halt to Iran’s 'egregious attacks' on its Gulf neighbours. Bahrain's Interior Ministry said on X that authorities were taking necessary measures following the attack but gave no further details, leaving the specific response measures unclear.

The extent of damage to the BAPCO refinery in Bahrain and other targeted facilities has not been fully assessed, and the exact volume of the production increase agreed upon by OPEC+ members for May remains under discussion. Iran started a series of attacks in retaliation for U.S.-Israeli strikes on the country, with a focus on U.S. allies in the Gulf hosting American military bases like Bahrain, after the U.S. and Israel battered Iran with nationwide strikes, targeting their military capabilities, leadership and nuclear program. Israeli and American leaders have suggested that toppling the government was a goal, and Iranian Supreme Leader Ayatollah Ali Khamenei was killed when they launched the war on Saturday, according to research from three sources. Iran has pressed attacks across the Gulf in response to US and Israeli strikes that killed its supreme leader on the weekend, targeting US bases but also civilian infrastructure including hydrocarbon facilities, as part of a broader wave of Iranian missile and drone attacks against Gulf countries, in the context of escalating conflict with the United States and Israel. Iran launched a new wave of attacks against Israel, American bases and countries around the region on Thursday, with the war affecting an additional 14 countries across the Middle East and beyond, indicating widespread impact with ongoing military and economic consequences.

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