The 2026 Iran war has triggered a multi-layered collapse of Middle East naphtha and LPG exports-driven by refinery destruction, terminal outages, and the effective closure of the Strait of Hormuz, cutting regional export supply by up to 90% and creating prolonged structural disruption to global petrochemical markets.

Long-Term Outlook

Director, Downstream

Aditya Banerjee

Consultant, Refining & Hydrogen

Sarfaraz Hussain

Petrochemicals 

Refining

The war in Iran has brought exports of naphtha and LPG from the Middle East to a near standstill, with multiple overlapping crises driving the disruption. Since the onset of hostilities, the region has suffered from physical attacks on refineries, the destruction of export terminals, and a blockade of the Strait of Hormuz. Together, these events have almost completely cut off the Middle East&rsquo;s supply of naphtha and LPG, wiping out exports from the UAE, Qatar, and Kuwait. Only Saudi Arabia can still send out some shipments, using very limited alternative routes.
Unlike previous energy shocks, this crisis is defined by physical damage so severe that repairs could take years. Even if shipping routes reopen, the destruction of loading terminals in Kuwait and major damage to facilities in Qatar mean bottlenecks will continue long after the fighting stops. This report examines the specific harm to refineries and ports around the Gulf, showing how these individual setbacks have compounded to cause a near-total collapse of the region&rsquo;s export system.
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Impact of the Iran War on Middle East Naphtha and LPG Exports

The war in Iran has brought exports of naphtha and LPG from the Middle East to a near standstill, with multiple overlapping crises driving the disruption. Since the onset of hostilities, the region has suffered from physical attacks on refineries, the destruction of export terminals, and a blockade of the Strait of Hormuz. Together, these events have almost completely cut off the Middle East&rsquo;s supply of naphtha and LPG, wiping out exports from the UAE, Qatar, and Kuwait. Only Saudi Arabia can still send out some shipments, using very limited alternative routes.
Unlike previous energy shocks, this crisis is defined by physical damage so severe that repairs could take years. Even if shipping routes reopen, the destruction of loading terminals in Kuwait and major damage to facilities in Qatar mean bottlenecks will continue long after the fighting stops. This report examines the specific harm to refineries and ports around the Gulf, showing how these individual setbacks have compounded to cause a near-total collapse of the region&rsquo;s export system.
<h2 style="line-height: 115%; margin: 0cm 0cm 6pt; text-align: left;">Middle Eastern Refining Infrastructure: Damage and Degradation</h2>
<h3>Impact on Naphtha Supply</h3>
<img src="https://cdn.aglty.io/stratas-advisors/upload/Screenshot%202026-04-13%20at%201.00.27 PM_20260413010129.png?w=800" alt="chart">
Physical strikes on refinery infrastructure across five Gulf countries have disrupted approximately 432 thousand barrels per day (mbpd) of naphtha production, more than 61% of their combined 2025 output of 708 mbpd. The damage is concentrated in two countries: the UAE and Qatar, which together account for 79% of the total loss, both having seen their primary naphtha-producing assets decline to zero.
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