UAE gas field attacked, Port Fujaairah halts again, global inflation risks rise

As the war in Iran continues, the energy market and supply are under increasing pressure every day. On Monday, a large gas field in the UAE caught fire after a drone attack, and the key oil port of Fujairah was once again brought to a halt. The latest events in the UAE have intensified the rapid spread of attacks on energy assets in the Middle East. Some large refineries and a giant LNG export terminal have ceased production after drone attacks, multiple ports in the region have been hit, and Saudi Arabia's oil fields have also been targeted. The escalating attacks from Iran are impacting global markets and economies, with consumers from the Americas to India and Japan feeling the impact. The near closure of the Strait of Hormuz has pushed crude oil prices above $100 per barrel, and the risk of inflation is increasing for the global economy. In the UAE, the Shah gas project, which was attacked, is the country's first production gas field to be hit. According to reports, authorities in Abu Dhabi have controlled the fire at this high-sulfur gas field in the Rub' al Khali desert in the western region of the country. Currently, operations have been halted with no reports of casualties. The attack on Shah occurred one year after U.S. Energy Secretary Chris Wright visited the gas field during a trip to the region. The gas field is operated by a joint venture between the Abu Dhabi National Oil Company and a Western oil company, located in the vast Rub' al Khali desert in the UAE, where Saudi Arabia's Shaybah oil field has also been repeatedly targeted. According to the Abu Dhabi National Oil Company website and Energy Association data, Shah gas field accounts for about one-fifth of the UAE's total natural gas production and produces a large amount of sulfur. According to a statement from the Iraqi Oil Ministry, the Majnoon oil field across the Persian Gulf in Iraq has also been attacked, but the statement did not provide more details. Fujairah Port Shutdown According to a shipbroker and an informed source, the key port of Fujairah in the UAE suspended ship loading operations again on Tuesday, after some operations briefly resumed on Monday. The port has been repeatedly attacked during the war. It was reported that on Saturday, the Iranian military warned that Fujairah port, as well as Jebel Ali and Khalifa ports in the UAE, had become "legitimate targets" due to the presence of U.S. military forces at civilian facilities. According to a memo from Inchcape Shipping Services, the liquid cargo tanker berths at Fujairah oil terminal, including those handling fuel, were suspended on Tuesday morning. The memo stated that a joint venture terminal operated by the Royal Dutch Shell company also halted operations at its offshore berths. This contradicts reports from Monday evening that parts of the oil tanker terminal had resumed operations. An informed source also revealed on Tuesday that a Kuwaiti-flagged liquefied petroleum gas ship was hit by drone fragments near Fujairah, causing minor damage. Fujairah port is a crucial hub for crude oil and fuel, and its importance to the UAE and global markets has been increasing as it is located outside the Strait of Hormuz, which is almost closed due to the war. The port is located at the end of a pipeline connecting Abu Dhabi's major oil fields and is a major export terminal for the UAE's Murban crude oil. It has extensive storage capacity, allowing traders to quickly access resources, and it is also a hub for refueling ships. Last week, as a precautionary measure, the UAE also halted production at its Ruwais refinery. Previously, a drone attack in its industrial area sparked a fire.