The most dangerous signal: Iran targets oil facilities in three countries, Middle East conflict escalates to "nuclear button" level

（Source: Defense Situation Report）

On March 18, the Islamic Revolutionary Guard Corps of Iran announced that the oil facilities of Saudi Arabia, the UAE, and Qatar are now “lawful targets of attack.” Not only did it say that—it named names: Saudi Arabia’s Samoraf Refinery and Jubail Petrochemical Base, the UAE’s Al Hosn Gas Field, and Qatar’s Al-Ma’ayid Petrochemical and Ras Laffan Refinery. Five targets—each one is an economic lifeline for these countries. Iran also said it would “strike within the next few hours,” urging people in the relevant areas to evacuate quickly. This isn’t just to scare people.

Since March 1, when the U.S.-led coalition began bombing Iran’s South Pars gas field, Iran has been hit again and again over the past half month. The U.S. military took out the island of Khark—more than 90 military targets were wiped out. Speaker Larijani was eliminated via a targeted strike. On the front lines, Iran is indeed under heavy pressure: its missile stockpile is getting smaller with every launch, and its command-and-control system has been infiltrated like a sieve. What should be done? Iran’s choice is crystal clear: I’ll hit your money bag.

Once the oil facilities in the Gulf states are struck by missiles—even if only one or two hits occur—the impact is far greater than blowing up a few tanks on the battlefield. Saudi Arabia’s Samoraf Refinery processes 400,000 barrels per day, and Jubail is one of the largest petrochemical complexes in the world. Qatar’s Ras Laffan is even more critical: the world’s largest LNG export terminal, with about 80% of Qatar’s LNG shipped from here. If this port is ruined, Japan, South Korea, and India’s natural gas supply would immediately be cut off—one third each. With Iran plus Saudi Arabia, the UAE, and Qatar—these five countries account for 30% of global oil production and more than 40% of LNG exports. Once these facilities are hit in a substantive way, the global supply gap in oil and gas is on the scale of several million barrels per day. Brent crude oil has already climbed to $107, and intraday it touched $110. I judge that this is still only the beginning.

When oil prices rise to this level, who hurts the most? The first is Japan and South Korea. These two countries’ dependence on Middle East oil is close to 90%, which is about 20 percentage points higher than during the 1973 oil crisis. In that 1973 crisis, Japan’s oil consumption plunged 16%, and its GDP growth rate directly fell from double digits into negative territory. Today, Japan’s external debt level and the burden of an aging population are far higher than back then. If oil prices remain above $120 for the long term, economies like those of Japan and South Korea—which rely heavily on imported energy—won’t be able to hold out for long.

Second is Europe. Germany’s manufacturing sector was already struggling in a quagmire, and the energy shock brought by the Russia-Ukraine war has not been fully digested. Now trouble has erupted in the Middle East as well. With a dual-track blow, Europe’s economic downturn is virtually a foregone conclusion.

Third, affected is China. China imports roughly 7 to 8 million barrels of oil from the Middle East every day—so the volume is right there. But objectively speaking, China has more room to maneuver than Japan and South Korea. Its strategic oil reserves have been built over many years, and at critical moments they can hold for a while. Moreover, Russia’s oil supply is actually even tighter in wartime, which can fill part of the gap. In addition, China is a manufacturing powerhouse across the entire industrial chain, and costs can be absorbed downstream through the industrial chain.

The United States’ situation is also somewhat delicate. The U.S. is a net oil exporter, and the shale oil industry does benefit from high oil prices. But once American households’ gasoline bills break above $5 per gallon, pressure comes to the White House.

So who really makes out by getting cheap advantages? Russia. The higher oil prices are, the more generously Russia has funding for its war, and the impact of Western sanctions is further diluted.

But what I want to say is that the most worth watching here isn’t the oil price—it’s Iran’s announcement of a brand-new way of fighting a war.

The 1973 oil embargo was carried out by Arab states collectively cutting production to impose economic sanctions—at its core, it was still a peaceful measure. So what is Iran doing now? It is using missiles to directly target neighboring countries’ economic infrastructure. This isn’t sanctions; this is “energy strangulation.” Upgrading oil as a weapon from an economic tool into a means of military strikes completely changes the nature of the act.

And once this model is proven effective, the demonstration effect would be enormous. There are only a few key nodes in global energy infrastructure: the Strait of Hormuz, the Strait of Malacca, the Suez Canal, and the Strait of Mandeb. Whoever controls these choke points holds the global economy’s heart. The future standard for measuring a country’s energy security level cannot look only at whether reserves are sufficient and whether sources are diversified. It must also consider whether your key facilities can withstand precise strikes.

This is a very important reminder for China. We have been推进ing energy import diversification—planning from multiple directions including the Middle East, Russia, Central Asia, and Africa. But if Middle East turmoil becomes long-term and normalized, it’s not enough to just “find a few more sellers.” You also have to think about which choke points these oil and natural gas must pass through and which vulnerable nodes they will dock at before reaching China. China’s energy security strategy may need to upgrade from “diversified supply” to “flexible supply.”

Returning to the war at hand. By aiming missiles at the oil facilities of the three Gulf countries, Iran is effectively tying the entire world to the betting table. For every $10 increase in the oil price, the global economic growth rate is dragged down by 0.2 to 0.3 percentage points. No one can stand completely outside it. But one thing is very clear: the side that can’t hold out first has to sit down for negotiations. And the leverage at the negotiating table is often not what is won on the battlefield, but what is dragged out through economic pressure.

Part of the material source: Xinhua News Agency