The Iran-Iraq War inflicted severe damage on Iran's oil and petrochemical industries, primarily through direct military strikes and disruptions to export infrastructure. Iraqi forces repeatedly targeted key facilities, including the oil terminal at Kharg Island, forcing Iran to rely on smaller, less efficient terminals at Lavan and Sirri islands.
Beginning in 1984, both nations engaged in the Tanker War, attacking over 100 oil tankers in the Persian Gulf. This conflict significantly reduced Iran's oil-exporting capacity, compounding the economic strain caused by air strikes and pipeline shutdowns.
The loss of oil income and foreign-currency earnings brought Iran's economic development programs to a near standstill. The city of Abadan, a major oil-refining center, was a primary target of early Iraqi offensives and remained a focal point of the war's destructive impact on Iran's energy sector.