Kharg Island: Iran's Oil Lifeline in Trump's Crosshairs and the Global Stakes

A small, unassuming island in the Persian Gulf holds the key to Iran's financial stability and, consequently, the global oil price. Understanding what a potential U.S. bombardment of Kharg Island could trigger, and the broader risks of an escalation, is paramount.

At first glance, Kharg Island appears to be little more than a desolate cluster of rocks. It's an arid, stony landscape, dotted with a few trees and a small town featuring an airstrip on its eastern shore. Yet, Kharg (also spelled Charg) is widely recognized as the very heart of the Iranian economy.

The reason for its immense significance lies in the dozens of massive circular oil storage tanks, clearly visible from above. These facilities store millions of liters of crude oil. Estimates suggest that the island can handle approximately 1.5 million barrels, or about 240 million liters, daily. This makes Kharg one of the most critical locations in the global oil economy, and therefore, of central importance to the Mullah regime.

Kharg's Central Role in Iranian and Global Oil Economies

"If you take out this island, you're taking out 80 to 90 percent of the Iranians' petroleum revenue. You are economically taking them out," stated former top U.S. military official Keith Kellogg on Fox News just over a week ago.

A successful, comprehensive attack on Kharg could severely cripple the Iranian government financially. However, and this is Tehran’s strategic leverage, the world economy would also suffer immensely from the destruction of these oil facilities, with consequences that are hard to foresee. Analysts fear that Kharg’s disruption in global supply chains could send oil prices soaring by 40 percent or more, according to media reports.

This vulnerability is well understood by Donald Trump. In the early hours of Saturday (CET), the U.S. President announced on his social network, Truth Social, a major U.S. military strike on Kharg. He described it as "one of the most devastating bombing campaigns in Middle Eastern history" and added that "all military targets" on Kharg had been destroyed.

While this account cannot be independently verified, the attack itself was confirmed by both the Iranian leadership and its state-controlled media. The Fars news agency reported that the U.S. military had targeted "the army's defense installations, the Joshan naval base, the airport tower, and the helicopter hangar of the Iranian Continental Shelf Oil Company." However, they claimed no damage to the oil facilities.

Trump also emphasized this point, stating he chose not to destroy the island's oil infrastructure for "reasons of decency." It is unlikely, however, that the U.S. President was solely guided by "decency." The American economy's dependence on affordable oil is too great, and the rising prices resulting from the Iran conflict are already significantly impacting industries and consumers in the U.S.

Oil Facilities Expanded Over Decades

The island, covering approximately 20 square kilometers (roughly the size of Amrum), evolved into a central hub for Iranian oil production starting in the 1950s. Following the 1979 revolution, the facilities were nationalized. They were steadily expanded with multiple terminals and piers, a gas plant, an airport, and colossal storage tanks. With each expansion, the island's importance grew. "Without Kharg, virtually no Iranian oil reaches the world market," concluded "Die Zeit."

Kharg, strategically positioned about 25 kilometers off the Iranian coast, has been contested for centuries due to its advantageous location, and at times even fell under British control.

In the 20th century, several U.S. presidents turned their attention to the island. Jimmy Carter had a plan to seize it in response to the hostage crisis at the U.S. embassy in Tehran, but it was never executed. Ronald Reagan also refrained from acting on the island during the Iran crisis in the 1980s. And Donald Trump has, so far, also shied away from the "big strike."

The Role of the Strait of Hormuz

Why has the current U.S. President held back? The Iranian army has threatened escalation in the event of U.S. attacks on Iranian oil facilities. A spokesperson stated that all oil and energy installations belonging to companies partly owned by or cooperating with the U.S. "will be immediately destroyed and reduced to rubble."

Such threats are likely less decisive for Trump than the unpredictable consequences of an attack or an (even riskier) occupation. The Center for Strategic and International Studies in Washington anticipates an "unprecedented crisis in energy markets" if Iranian oil exports are disrupted.

Doran Eckel, an expert at the Hudson Institute in New York and former U.S. government official, explained to "Euronews" that Trump has deliberately drawn a "red line" around Kharg, sparing the island for now.

Another flashpoint exists in the Persian Gulf: the Strait of Hormuz, considered the Achilles' heel of the global oil economy and another means of leverage for Tehran. All tankers shipping their cargo from Kharg and other oil terminals in the region must pass through it.

Donald Trump Threatens Further Attacks

De facto, the strait has been largely closed since the start of the conflict, with few ships risking passage. Donald Trump recently offered naval escorts to enable passage through the Strait of Hormuz, but this sea lane remains highly risky due to Iranian attacks and sea mines.

Should Kharg and its surrounding oil fields fall into American hands or be destroyed, the Tehran regime would have little left to lose and could fully escalate tensions in the Strait of Hormuz, with similarly unforeseeable consequences for the global economy.

Trump has already issued a warning: should Iran or anyone else impede the free and safe passage of ships through the Strait of Hormuz, he would immediately reconsider his decision to spare the oil infrastructure.

Whether another attack occurs is a delicate calculation – balancing pressure on Tehran against the risk of a global energy crisis.