Rystad: Gulf energy infrastructure damage could reach $58 billion

The restoration of damaged energy infrastructure in Persian Gulf countries could require up to $58 billion, a report by consultancy Rystad Energy said.

Rystad Energy estimates that repairs to oil and gas infrastructure alone could cost up to $50 billion. The company noted that the escalation of the US-Israeli military campaign against Iran and Tehran’s retaliatory actions in late March and early April more than doubled the estimated recovery costs compared to a previous forecast of $25 billion, Caliber.Az reports, citing Russian media.

Rystad Energy has assessed the damage across impacted energy-linked facilities and estimates total repair and restoration costs in the range of $34 billion to $58 billion.

“The lower end of the range assumes that, for facilities where the extent of damage is not yet fully clear, impacts are limited in scope, allowing for modular repairs supported by existing spare equipment and shorter procurement cycles,” the agency said.

The higher cost projections are based on worst-case scenarios involving confirmed structural damage to key facilities.

These scenarios necessitate the complete replacement of critical systems and factor in reliance on equipment with long lead times.

Furthermore, the estimates include conflict-related premiums for Engineering, Procurement, and Construction (EPC) execution, such as war-risk insurance and contractor mobilisation.

Additional costs stem from delays associated with contractor deployment, logistical constraints, and, in certain instances, limited access to international supply chains.

Oil and gas sector repair costs are estimated at $30 billion to $50 billion, the analysis showed.

Non-hydrocarbon infrastructure (aluminium smelters, steel plants, power stations, and desalination facilities) will add $3 billion to $8 billion.

Country-level cost distribution varies significantly, both in scale and asset type.

Iran has the most impacted facilities across the widest range of asset types, with potential repair costs up to $19 billion in a high-damage scenario, the agency’s estimates showed.

By Vafa Guliyeva