During the first two weeks of the recent war in the Middle East, U.S. and Israeli attacks rained down on military and energy facilities across Iran, but one facility remained conspicuously untouched.
Despite its small size, Kharg Island is Iran’s economic lifeblood, handling around 90% of the country’s oil exports, meaning an attack on it risks major escalation.
But on Friday, the United States attacked military facilities on the island. No sites related to oil trading were attacked, according to U.S. officials and Iranian state media. But President Trump has threatened to attack those ships if Iran continues to block them from passing through the Strait of Hormuz.
Here’s what you need to know about this important spigot in Iran’s oil export business.
Why are islands so important?
Kharg Island is a coral outcrop about one-third the size of Manhattan located just 25 kilometers (15 miles) off the coast of Iran in the Persian Gulf.
Almost every day, millions of barrels of crude oil flow into the island through pipelines from Iran’s major oil fields such as Ahvaz, Marun and Ghaksalan. The island is known as the “Forbidden Island” among Iranians because of its strict military control.
Its long jetty juts into water deep enough for oil supertankers to dock, making the island an important location for oil distribution. It processes 90% of Iran’s crude oil exports.
The island has long been key to Iran’s economy. A 1984 CIA document states that these facilities are “the most important of Iran’s oil system and their continued operation is essential to Iran’s economic prosperity.” Israeli opposition leader Yair Lapid recently said the destruction of the terminal would “paralyze Iran’s economy and bring down the regime.”
Iran supplies about 4.5% of the world’s oil, pumping 3.3 million barrels of crude oil and 1.3 million barrels of condensate and other liquids every day, according to Reuters.
And TankerTrackers.com, which tracks oil shipments using satellite imagery, coastal photography and data, says the island has been loading tankers “nonstop since the war began.”
US investment bank JP Morgan said in a note reported by Reuters that exports from Kharg rose to near-record levels in the weeks leading up to the US and Israeli attack on Iran.
Kharg Island’s storage capacity is estimated at about 30 million barrels, according to Reuters, and global trade analyst Kupler said it currently stores about 18 million barrels of crude oil.
President Trump announced Friday that the U.S. military had carried out what he called “one of the most powerful air strikes in the history of the Middle East,” destroying military assets on Kharg Island.
A video posted by President Trump on Truth Social and geolocated by CNN showed the US attack on the airport complex and runway in Kharg.
A US military official told CNN that the attack was “massive” but avoided hitting the island’s oil infrastructure. The official added that targets also included naval mine storage facilities, missile depots and other military infrastructure.
Iran said more than 15 explosions were reported on the island, but no oil infrastructure was damaged, the state-run Fars news agency said.
But President Trump has threatened to attack the island’s oil assets if Iran continues to block shipping from the Strait of Hormuz.
What impact would the strike have on the war and world oil prices?
Iran said any attack on oil and energy infrastructure would lead to retaliatory attacks on facilities in the region owned by U.S.-friendly oil companies, Iranian state media reported, citing Tehran’s military command.
U.S. airstrikes have increased the risk of war, retired military officials told CNN.
A former U.S. Army brigadier general said, “We’re no longer in a situation where it was just “If you get rid of the military, you get rid of the regime,” but now you’re potentially eliminating the economic lifeblood of this country.” Mark Kimmitt said.
Kimmitt said the United States was holding the island “hostage” to ensure that Iran could ensure ships could pass through the Strait of Hormuz, where oil prices were already soaring due to its closure.
If that oil infrastructure is targeted, “it’s clear that Iran will attack the rest of the infrastructure in the Middle East,” Kimmitt said.
“And at that point, oil prices will be out of control,” he added.
Muyu Xu, a senior oil analyst at Kpler, told CNN that if the Kharg oil facility is attacked, Iran could take months, if not more than a year, to rebuild, adding that China, a major buyer of Iranian oil, would likely be the most affected.
“They (Iran) still face Western sanctions and in fact cannot secure sufficient funds, technology and expertise, so rebuilding will be difficult,” Xu added.
Analysts said Iran could escalate further by using threats to damage oil infrastructure around the region. It has already attacked oil storage tanks in U.S. allies Oman and Bahrain, and has also targeted oil tankers and cargo ships in the Persian Gulf.
The Islamic Revolutionary Guard Corps also threatened to “set fire” to oil and gas infrastructure in the region if Iranian energy facilities were attacked.
The Kharg attack came as the United States announced it would send a Rapid Response Marine Corps of about 2,500 Marines and sailors to the Middle East. Former US Army Brigadier General. Kimmitt raised the possibility of his forces occupying Kharg Island.
It is not yet clear what the MEU will be used for or exactly where it will be deployed. However, these forces have traditionally been used for missions such as mass evacuations and amphibious operations requiring ship-to-shore movement, including raids and assaults.
Experts also argue that any attempt to capture or attack Kharg Island would require significant ground forces, but the Trump administration has so far been reluctant to send ground forces.
