In what marks a new escalatory phase, the US Friday bombed Iran’s Kharg Island, a small 8-km-long rocky outcrop in the Persian Gulf around 50 km off the Iranian mainland, through which almost all of the country’s oil exports flow. Despite some 5,000 places targeted in Iran since the start of the US-Israel military operation, Kharg had been spared so far.
In a post on Truth Social, US President Trump said military targets on Kharg Island had been “totally obliterated” in “one of the most powerful bombing raids in the History of the Middle East.” He said he had chosen not to target oil infrastructure on the island for now.
According to officials quoted by Reuters, only “military targets” on Kharg Island were targeted and the US Navy would soon begin “escorting tankers” through the Strait of Hormuz.
“Our Weapons are the most powerful and sophisticated that the World has ever known but, for reasons of decency, I have chosen NOT to wipe out the Oil Infrastructure on the Island. However, should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision,” Trump said in his post.
Kharg Island is arguably Iran’s most sensitive economic target. The reason why this export terminal has remained untouched throughout the devastating US-Israel attacks is that bombing the site would likely trigger a sustained increase to already surging oil prices, as it would amount to neutralising almost all of Iran’s daily crude exports. With this attack now happening, the chances are that crude could move towards the $150 per barrel mark.
“No major Iranian oil & gas production, export facility has thus far been attacked. I believe it is a deliberate measure in the interest of stabilizing the oil price. It is partly a signal to Iran to reciprocate by refraining from attacking other countries facilities – which it has so far rebuffed. It is partly also a measure to keep the Iranian people on side in the days after the war, as Iran’s ability to produce and export oil and gas will be the foundation on which its economy can be revived,” an expert affiliated with a Japanese shipping major told The Indian Express hours before the strike.
On an average, around 1.5 million barrels of oil pass through Kharg every day, though Iran had sharply ramped up volumes to 3 million barrels a day in mid-February, according to the investment bank JP Morgan. This was in anticipation of a US-led attack. A further 18 million barrels are stored on Kharg as a backup, JP Morgan said in a note.
As of late 2025 and early 2026, Iran’s total oil exports, including crude and condensate, were estimated to be around 1.8 million barrels per day, with the majority going to China. Production in early 2026 was reported near 3.1 million barrels per day. Much of this was clearly routed through Kharg.
Kharg is particularly significant for Iran since most of that country’s coastline is too shallow for very large crude carriers to dock. Kharg is pretty close to deep waters and has jetties built in on its eastern shoreline.
The infrastructure on Kharg allows very large crude tankers to be able to come up to the terminal quite easily, and then get back down the Persian Gulf and out of the Straits of Hormuz, all the way to China – the main user of Iranian oil. From a strategic point of view, Kharg island is the economic lifeline of the regime in Iran and is fundamental to the Iranian Islamic Revolutionary Guard Corp (IRGC) to keep fighting back the Americans and the Israelis. Theoretically, if the Americans were to take that island and hold it, then they could effectively cut off the economic lifeline of the Iranians, thereby stunting their ability to be able to conduct this war. And the ability of the Iranians to obstruct the Strait of Hormuz – the crucial maritime lifeline that is a vital conduit for transition of West Asian crude.
But the problem for the Americans is that they would ideally not want to cause collateral damage to the oil export infrastructure on Kharg Island, since that would most certainly send the prices of crude surging. Especially as China looks to buy from elsewhere. Markets are already nervous and the destruction of Iran’s oil infrastructure could dampen sentiments further. Also, there are indications that the Trump administration could be eyeing a Venezuela type of upside, where they get to access Iranian oil after a possible regime change. Which is why the White House went out of its way to clarify that the action was specifically against the military targets on Kharg, which has an air strip and some military installations, and not the oil infrastructure housed on the island.
Kharg is where pipelines from Iran’s oil fields in the middle and the west of the country terminate. Set up by a US oil conglomerate, American Oil Company or Amoco, it was seized by Iran during the 1979 revolution. Amoco continues to retail fuel brands under BP ownership.
There is a view that since the Americans helped set up all this, they have a rightful stake on the oil infrastructure in Iran, including Kharg Island. That resonates with the American administration’s view on Venezuela’s oil infrastructure, which too the Americans helped set up almost half a century ago.
