By Collin Eaton and Matthew Dalton

When Iranian missiles struck the Pearl gas-to-liquids facility in Qatar, they knocked out one of Shell's crown jewels, a giant plant that is among the most sophisticated and profitable businesses in the company's sprawling global operations.

The plant was so heavily damaged that one of its two production lines is expected to be shut for at least a year, Qatar said.

Some of the Western oil industry's most important investments have become targets for Iran in its war with the U.S. and Israel. Exxon Mobil, which has more at stake in Qatar than any other big oil company, gets roughly one-fifth of its oil-and-gas production from the Middle East, analysts estimate.

Chevron operates big gas assets off the coast of Israel that it has shut off, while ConocoPhillips has stakes in Qatari gas assets. About 17% of TotalEnergies' annual operating income comes from oil and gas stuck behind the Strait of Hormuz, the narrow waterway that connects the Persian Gulf to global markets, according to Goldman Sachs.

"This has been a cash cow for the U.S. international oil companies," said Jim Krane, an energy specialist at Rice University's Baker Institute for Public Policy in Houston. "It's got to be intensely frustrating. They're going to have to rebuild in some cases, at an insanely high expense."

The damage to Pearl hits a facility that is personal for Shell Chief Executive Wael Sawan, who oversaw its planning, construction and operation in previous roles at the company. The plant, which cost nearly $20 billion, is the largest in the world that turns gas into liquid petroleum products and is considered one of the U.K. oil company's top-performing assets.

Pearl "is an asset that's close to my own heart," Sawan told a meeting of analysts in 2022, as he touted the facility's performance.

Shell said repairing the Pearl plant would take about a year.

In the past decade, the largest U.S. and European oil companies have spent far less of their capital exploring new oil frontiers. They have doubled down on existing partnerships with big oil-and-gas producers in the Middle East, such as Qatar, Saudi Arabia and the United Arab Emirates, while also focusing on smaller-scale drilling in the American oil patch.

The Middle East projects have generated hefty profits for the companies, but also left them more exposed to the region's geopolitical conflicts. Escalating attacks on Persian Gulf oil-and-gas infrastructure last week marked a new phase of the war that threatens to worsen the crisis over energy supplies.

Now, the companies are facing disruptions that could last for years. Iran's attacks on Qatar's gas operations are particularly worrying for the global economy because of the country's role as the world's second-largest supplier of liquefied natural gas, or LNG. Western companies are betting that global consumption of the fuel will rise for decades even as economies try to wean themselves off other fossil fuels.

Exxon is poised to lose about $5 billion in revenue a year after Iran's missile strikes damaged Qatar's natural-gas facilities -- and repairs could take as long as five years, based on damage and revenue loss estimates from state-owned QatarEnergy. Exxon booked more than $330 billion in revenue last year.

The company has had a presence in Qatar since 1955, with current stakes in nine LNG liquefaction lines and 27 tankers. It is a 6.25% partner in the expansion of Qatar's North Field, a major build-out that could be delayed because of the conflict. Exxon evacuated its nonessential staff from the Middle East earlier this month.

A few years ago, an Exxon executive told an Arabic news outlet that the company had spent $30 billion on gas projects in Qatar since the 1990s. In the U.S., Exxon is partnered up with Qatar on a Gulf Coast LNG facility that is set to come online this year.

Exxon is also a partner in Saudi Aramco's Samref refinery, which sits on the coast of the Red Sea. Iran targeted -- but didn't damage -- the site last week. Exxon has five joint ventures with Saudi Aramco and a Saudi chemical company to refine oil into fuel and make petrochemicals. Exxon also has operations in the U.A.E., where it is a partner in oil-field joint ventures.

In addition to the Pearl plant, Shell has a 30% stake in a Qatari LNG production line that hasn't been damaged in the war. Oil and gas passing through the Strait of Hormuz accounts for 8% of the company's operating profit, according to Goldman.

Occidental Petroleum, another U.S. oil producer, has a large stake in the U.A.E.'s Shah gas field, which suspended production after an Iranian drone attack. Oil-field-services companies such as Baker Hughes and SLB provide oil-and-gas equipment across the Middle East.

Despite the disruption, big oil companies have seen their shares jump with soaring oil prices. Iran's effective closure of the Strait of Hormuz has driven oil to around $100 a barrel, meaning if the war lasts long, profits for Exxon, Shell and others will only keep climbing. Since the start of the war, Exxon shares are up almost 5%; Shell, up 9%; ConocoPhillips, up 12%.

Before the war began, many oil companies including EOG Resources and Continental Resources were looking overseas for investment opportunities because they saw few sweet spots left in U.S. shale oil fields. Chevron and others have been building out exploration teams and considering further investments overseas to secure future oil reserves.

"The question now is whether that strategy still makes sense, and if it does, where would you place your dollars?" said Amy Myers Jaffe, a research professor in global affairs at New York University. "Don't you have to consider geopolitical risks more sternly when you place your dollars?"

Write to Collin Eaton at collin.eaton@wsj.com and Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

March 22, 2026 22:00 ET (02:00 GMT)

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