The U.S. military bombed Iran’s most strategic economic asset, Kharg Island. The tiny spot of land in the northern Persian Gulf is the launch point for 90% of the country’s oil exports.
President Trump said he spared oil facilities in the bombardment, which went after military targets only. But he warned he would reconsider that decision if Iran didn’t open the Strait of Hormuz to international shipping traffic.
Why did Trump order an attack on Kharg Island?
The depot is the beating heart of the Iranian oil industry, storing and loading most of its crude oil exports. Iran has continued loading from Kharg even as it impedes transit through the Strait of Hormuz for other exporters. Trump indicated that he is targeting Kharg to force the Iranians to loosen their grip on the Strait of Hormuz.
Is Kharg Island shut down after the attacks?
Iranian officials confirmed Trump’s comments that U.S. strikes on Kharg Island, the site of Iran’s main oil terminal, hit military targets but didn’t damage the oil facilities. “They attacked the army. Jetty and storages are OK,” said Hamid Hosseini, a board member at the Iranian Oil, Gas and Petrochemical Products Exporters’ Union.
What will the attacks on Kharg mean for oil prices?
So far, the attacks went after military targets only. If the island’s oil infrastructure is damaged, that could force Iran to cut production at its oil fields, potentially taking another one million barrels of production away from global markets. This would be in addition to cuts implemented by Iraq, Kuwait and Bahrain.
Where is Kharg Island?
Kharg sits near the northern end of the Persian Gulf, about 20 miles off the coast of Iran. It is several hundred miles from the Strait of Hormuz, the other major geographical flashpoint in the war.
At about 8 square miles, Kharg Island is roughly a third the size of Manhattan. It has an airport, oil terminals and ports. Oil is pumped to the island through subsea pipelines and stored in massive storage facilities before being loaded onto tankers.
What has Iran said in response to the attack on Kharg Island?
Iran has warned Persian Gulf states that an attack on Kharg Island would be a red line, leading to a wave of attacks on the energy infrastructure of its oil-rich Arab neighbors. That is why the U.S. attacks on Kharg on Friday, while potentially striking a blow to Iran’s ability to export oil, could also trigger further escalation of the conflict.
Iran’s Islamic Revolutionary Guard Corps said Saturday that the oil and energy infrastructure of countries cooperating with the U.S. “will be immediately destroyed and reduced to ashes” if there is an attack on Iran’s energy assets. The statement by the most powerful political force in Iran’s government didn’t name the Iranian oil-exporting hub of Kharg Island but alluded to Trump’s statements.
How important is Kharg Island to Iran’s oil industry?
Iran exports half of its roughly 3.5 million barrels of crude oil production, and 90% of those exports came out of Kharg Island.
Kharg Island is the primary hub for pipelines transporting crude oil from Iran’s most significant production areas, such as Ahvaz, Marun, and Gachsaran. In a few days leading up to the war, Iran accelerated exports from Kharg Island to near record levels, loading more than two million barrels daily.
Currently, about 18 million barrels of crude are stored on the island, equivalent to 10 to 12 days of Iran’s exports, according to Natasha Kaneva, an analyst at JPMorgan. The total storage capacity of the island is about 30 million barrels.
“If Kharg Island were disabled, the loss of its storage buffer and the scarcity of viable export alternatives would rapidly trigger upstream shut‑ins across major southwest fields,” according to Kaneva.
Does Iran have alternative ways to export its oil?
Iran has another oil terminal in Jask, which sits on the Gulf of Oman, outside the Strait of Hormuz. Opened in 2021 and lightly used before the conflict, Jask has become a key alternative to Kharg in recent weeks. But it has limited capacity, able to load around one million barrels a day, half of the capacity of the Kharg terminal.
Has Kharg Island been attacked before?
In 1984 and 1985, during the Iran-Iraq war, Iraqi bombers attacked Kharg Island and ships serving its ports to disrupt Iran’s main economic lifeline.
Who buys Iranian oil?
The short answer: China. Iran sells its crude mainly to small Chinese refiners known as “teapots.” These private refiners don’t have much international exposure and therefore largely ignore U.S. sanctions. Iran accounts for roughly 13% of China’s seaborne oil intake before the war.
Even after the war began, China continued to take in Iranian oil. At least 10 tankers had collectively taken almost 19 million barrels from Kharg Island as of Friday, according to data provider Kpler.
Write to Costas Paris at costas.paris@wsj.com, Rebecca Feng at rebecca.feng@wsj.com and Benoit Faucon at benoit.faucon@wsj.com