The Israeli military has announced that it targeted fuel storage facilities linked to the Islamic Revolutionary Guard Corps in Tehran on March 7, 2026. Videos circulating online show massive flames and thick plumes of smoke rising from oil depots in Tehran and Karaj.
Tehran Governor Mohammad Sadegh Motamedian said on March 8 that fuel supply in the capital had been disrupted and urged citizens to avoid non-urgent visits to gas stations.
It is not yet clear how much fuel stored in the capital’s depots was destroyed. However, even if the targeted facilities were linked to the Islamic Revolutionary Guard Corps, there is little doubt that the government will redirect fuel allocated to citizens toward the Guard.
It is not yet clear how much fuel stored in the capital’s depots was destroyed.
Daily gasoline consumption in Tehran is normally around 5.3 million gallons, accounting for 17 percent of the country’s total gasoline consumption. In addition, Tehran consumes about two million gallons of diesel per day, which represents roughly 6 percent of national diesel consumption.
According to confidential data from Iran’s Ministry of Petroleum obtained several months ago, the country’s total gasoline reserves amount to less than 400 million gallons, enough to cover only eleven to twelve days of domestic consumption under normal conditions.
Following the targeting of several petroleum product depots in Tehran, the Islamic Republic launched a drone attack on fuel storage facilities at Kuwait International Airport.
Although the Kuwaitis contained the fire at the airport’s fuel tanks, Iran’s reckless attacks on oil infrastructure in Saudi Arabia and other Arab states along the Persian Gulf risk legitimizing retaliatory strikes against Iran’s own energy infrastructure.
Meanwhile, Kuwait has reduced its oil production and halted exports. Before the closure of the Strait of Hormuz, Kuwait exported 1.9 million barrels of crude oil per day and 860,000 barrels per day of petroleum products, together equivalent to about 2.5 percent of global daily oil consumption. Kuwait and other Arab neighbors cannot indefinitely wait for Iran to end its disruption of traffic through the Strait of Hormuz.
Kuwait and other Arab neighbors cannot indefinitely wait for Iran to end its disruption of traffic through the Strait of Hormuz.
On March 7, Saudi Arabia warned Iran that it would “respond in kind” to attacks on its energy and economic infrastructure. Iran has already targeted Saudi facilities, including the Ras Tanura, Abqaiq, and Khurais petroleum structures and refineries, and has carried out similar attacks against oil installations in other Gulf Arab states.
Five major Iranian refineries—Abadan, Persian Gulf Star, Bandar Abbas, Shazand, and Lavan—account for 65 percent of Iran’s total refining capacity, and they are all located near the Persian Gulf, placing them within the easy reach of neighboring Arab states. In addition, 70 percent of Iran’s natural gas comes from the South Pars field, which it shares with Qatar, while 80 percent of the country’s oil production is concentrated in areas near the Persian Gulf.
Any retaliatory strikes on these facilities could paralyze Iran’s energy sector for decades. Even if the Islamic Republic were to collapse, a successor government would be unable to meet the country’s energy needs. The resulting economic devastation could make it nearly impossible to maintain state authority and national governance.
Beyond domestic consumption, petroleum products account for 55 percent of Iran’s total exports. When petrochemical exports are included, the figure rises to over 75 percent.
There is little doubt that Iran’s $80–85 billion in annual exports of crude oil, petroleum products, and petrochemicals currently finance the Islamic Republic’s war and repression apparatus. However, after the regime’s collapse, these same revenues would represent the country’s hope and resource to rebuild the economy and establishing a stable state.
Global commercial oil inventories stand at about 2.8 billion barrels, which has helped prevent a sharper spike in prices.
The Strait of Hormuz—effectively blocked by Iran since the beginning of March—accounts for about 20 percent of global oil consumption and a similar share of global trade in liquefied natural gas. Since Iran began disrupting traffic through the strait, global oil prices have surged by about 30 percent in a week to roughly $93 per barrel, while natural gas prices in global markets have doubled.
Currently, global commercial oil inventories stand at about 2.8 billion barrels, which has helped prevent a sharper spike in prices. However, if the Strait of Hormuz remains blocked for several more weeks, global oil prices could rise to $120–$150 per barrel.
The disruption extends beyond oil and liquefied natural gas markets. Approximately 40 percent of the world’s sulfur and 30 percent of global chemical fertilizer supplies pass through the Strait of Hormuz. Over the past week—during the agricultural planting season—fertilizer prices have surged sharply, exceeding $570 per ton, a development that could affect global food security.
For this reason, measures must be taken to ensure that the Strait of Hormuz remains open. Otherwise, the Islamic Republic hopes to leverage turmoil in energy and food markets as pressure on the United States in order to force a halt to the war.
