Kharg Island, where US forces struck military targets on Friday, serves as the gateway for about 90% of Iran’s oil exports and has long been seen as a critical weak point that could trigger strong retaliation from Tehran if attacked, according to Reuters.
US President Donald Trump said on social media that the US had “completely wiped out every MILITARY target” in Kharg and threatened that if Iran continued to interfere with shipping in the Strait of Hormuz, it could target oil infrastructure.
Kharg Island – strategic importance
Often referred to as the “orphan pearl” of the Persian Gulf by Iranian writer Jalal Al-e Ahmad, this small coral island has served various roles throughout history, including a commercial center, a place of exile, a religious site and a strategic military location.
During the Pahlavi era, the role of the island changed significantly. Between the 1940s and 1958, Kharg served as a remote penal colony and a place of exile for political opponents.
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Kharg Island lies about 16 miles (26 km) off the coast of Iran and roughly 300 miles (483 km) northwest of the Strait of Hormuz. The surrounding deep waters allow large oil tankers, too large to reach the shallow coastal areas of the mainland, to dock and load oil, Reuters reported.
A satellite image shows an oil terminal on Kharg Island, Iran, February 25, 2026. 2026 Planet Labs PBC/Handout via REUTERS THIS IMAGE IS PROVIDED BY A THIRD PARTY. MANDATORY CREDIT(via REUTERS)
Its surrounding deep waters allow large oil tankers to easily load oil, an advantage that much of Iran’s coastline lacks. As a result, the island accounts for a significant share of Iran’s oil exports to international markets.
Data from the U.S. Energy Information Administration shows that in 2024, about 20 million barrels of oil moved through the Strait of Hormuz every day, making it one of the world’s most important energy corridors. Much of Iran’s oil passing through the strait comes from facilities linked to Kharg Island, Reuters reported.
Iran, which increased oil production before the Feb. 28 war involving Israel and the United States, continued to export oil at a rate of about 1.1 million to 1.5 million barrels a day, according to data from TankerTracker.com and Kpler.
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Meanwhile, markets are closely monitoring whether the strikes have caused any damage to the complex system of pipelines, terminals and storage facilities on Kharg Island. Even limited disruptions could further squeeze global supply and add pressure to an already volatile oil market.
“You take out the Kharg infrastructure and then you take 2 million bpd out of the market for good – not until the straits are fixed,” said Dan Pickering, chief investment officer at Pickering Energy Partners, according to Reuters.
Iran’s armed forces said on Saturday that any strike on the country’s oil and energy facilities would trigger retaliatory attacks on energy infrastructure owned by companies in the region that cooperate with the United States, Iranian media reported.
“I’m very concerned that this raises the temperature and Iran has less to lose and it seems to be escalating. When Iran is backed into a corner, it’s very emboldened to act,” said Patrick De Haan, an analyst at U.S. fuel price tracker GasBuddy, as reported by Reuters.
Iran has almost halted shipping through the Strait of Hormuz, through which 20% of the world’s oil flows, mostly to Asia.
A key source of supply for China
Much of the oil exported from Iran through Kharg is delivered to China, the world’s largest oil importer. Beijing has taken steps such as curbing exports of refined fuel to protect domestic supplies amid blackouts in the Middle East.
So far this year, Iranian oil has accounted for about 11.6% of China’s oil imports by sea, according to tanker tracking company Kpler. Most of these shipments are bought by independent refiners, which benefit from steep discounts resulting from US sanctions against Tehran.
Iran exported 1.7 million bpd of oil this year, of which 1.55 million bpd was delivered via Kharg, Kpler data show.
Ahead of the war, Iran boosted exports to about 2.17 million bpd in February, Kpler data showed. It delivered a record 3.79 million bpd in the week to February 16, data show.
Kharg has a storage capacity of roughly 30 million barrels and held about 18 million barrels of crude as of early March, according to a JP Morgan report citing Kpler data.
According to satellite images reviewed by TankerTrackers.com, several very large oil tankers were being loaded in Kharg on Wednesday.
Iran is the third largest producer in OPEC, accounting for around 4.5% of global oil supply. The country produces about 3.3 million barrels of oil per day, in addition to about 1.3 million barrels per day of condensate and other liquid hydrocarbons.
(With input from agencies)
Key things
- Kharg Island is critical to Iran’s oil exports, serving about 90% of its oil supplies.
- The geopolitical situation around Kharg could significantly affect global oil supply and oil prices.
- Any retaliatory actions by Iran could escalate regional tensions and further disrupt oil markets.
