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refining operations. While full details remain limited, early reports indicate an Iranian ballistic missile attack targeted energy infrastructure in the industrial zone rather than upstream production.Authorities have not yet released a full damage assessment, although reports mention several large fires at Bahrain Petroleum Company’s primary refinery. It remains unclear whether refinery operations have been disrupted.Editors' Update: Bahrain's BAPCO confirms a strike on its 405k b/d Sitra refinery; no casualties were confirmed. BAPCO claims that the refinery is still operational and that the fire has been contained.Energy markets reacted quickly to the reports, with refining margins widening as traders moved to price in the risk of supply disruptions. Crack spreads—an indicator of refinery profitability that measures the price difference between crude oil and refined products such as gasoline and diesel—have been climbing as markets begin to focus on refining capacity as a potential pressure point.Diesel margins, tracked by the ICE gasoil crack spread against Brent, widened as traders priced in potential refinery disruptions in the Gulf. ICE low-sulfur gasoil futures surged more than $100 per metric ton in early trading, far outpacing gains in Brent crude, which rose only a few dollars per barrel as traders brace for potential disruptions to diesel and jet fuel supply.In recent days, attacks and threats against energy infrastructure across the Gulf have increasingly shifted attention away from crude production and toward the refining system that turns crude into usable fuels.Global crude supply is typically buffered by inventories and spare production capacity, allowing markets time to adjust to supply losses. Refining capacity, however, is far less flexible. Damage to a refinery can tighten product markets almost immediately, pushing up prices for gasoline, diesel, and jet fuel.Bahrain’s refining sector may be modest compared with those of Saudi Arabia or the United Arab Emirates, but it remains an important hub for refined fuel supply in the Gulf. 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