On March 23, 2018, a support vessel sails near the crude oil tanker Devon, which is sailing through the Persian Gulf to the Khalk Island oil terminal to transport crude oil to the export market in Bandar Abbas, Iran.
Ali Mohammadi | Bloomberg | Getty Images
Iran’s Kharg Island, a small but strategically important piece of land in the northern Persian Gulf, has not been attacked by US or Israeli forces, even as the Middle East conflict enters its second week.
This coral island, located about 24 miles off the coast of mainland Iran, serves as the center of Iran’s oil industry.
It is estimated that around 90% of the country’s crude oil exports pass through the Strait before tankers pass through it. The island’s loading capacity is said to be approximately 7 million barrels per day.
Kharg’s economic importance to Iran makes it particularly vulnerable to the threat of military action, but analysts say any attempt to seize the island would likely require a ground force operation, something the United States would be reluctant to do.
Additionally, with oil prices soaring to more than $100 per barrel, an attack could further heighten the instability of the energy market.
Capturing the island would “cut off a vital oil lifeline” for the Iranian regime, said Petras Katinas, a climate, energy and defense researcher at the London-based defense think tank RUSI.
“Of course, right now shipping through the Strait of Hormuz is stopped, so the oil cannot be sold in any case, but looking to the future, its capture will give the United States leverage during negotiations, regardless of which regime is in power after the end of the military operation,” Katinas told CNBC via email.
“However, seizures would require a ground force operation, which the current administration seems reluctant to embark on, at least for now,” he added.
Crude oil futures rose to their highest since mid-2022 on Monday after the United States and Israel launched new attacks across Iran over the weekend.
The attack hit multiple fuel facilities in Iran, including oil depots, and signals a new phase in the war as the broader Middle East crisis continues into its 10th day.
international benchmark brent crude oil futures May delivery prices rose nearly 16% to $107.18 per barrel on Monday morning, slowing earlier gains, but in the U.S. West Texas Intermediate Futures April deliveries were last seen up 12.5% at $102.1.
involves risk
“If President Trump decides to take control of this vital base, it would be a significant blow to the Iranian regime as it would deprive it of an important source of revenue. Such a move would be reminiscent of the U.S. intervention in Venezuela earlier this year, which effectively took control of the country’s oil sector,” Tamas Varga, an oil analyst at brokerage PVM, told CNBC via email.
“That may signal a resumption of Iranian oil exports, but only if the strait is reopened, under US supervision, of course, but at the same time it remains vulnerable to drone attacks from within Iran. An eventual US occupation of the island would further complicate an already complex situation,” he added.
Normally, about 20% of the world’s oil and gas passes through the Strait of Hormuz, but since the war began late last month, shipping traffic through this vital maritime corridor has all but come to a standstill.
In Tehran, Iran, March 8, 2026, a fire breaks out at the Shahran oil depot after a US-Israeli attack, disabling numerous fuel tankers and vehicles in the area.
Anadolu | Anadolu | Getty Images
U.S. President Donald Trump could be tempted to order U.S. forces to occupy Kharg Island for several reasons, said Mark Gustafson, a former White House situation director who previously served under Presidents Trump, Joe Biden and Barack Obama.
These include the opportunity for President Trump to claim a “huge PR victory,” giving the U.S. military a natural barrier from mainland Iran, and the fact that it fits with the president’s push to secure maximum influence over the Iranian regime.
But Gustafsson, now senior director of analysis at Eurasia Group, said such an operation would be risky.
Gustafsson said in a LinkedIn post last week that any attempt to capture the island would require a U.S. military presence on the ground and would likely become a target for Iranian drones for weeks.
He also warned that oil prices could rise further and that the Iranian government might even consider self-destruction by destroying the pipelines that supply the oil.
“There’s one concept or aspect of this that no one seems to be mentioning, and that’s Kharg Island,” Van Eck Fund CEO Jan van Eck told CNBC’s “Power Lunch” on March 2.
“Ninety percent of Iranian oil is exported from Iran, so that’s the challenge. And if you think Trump is just following the same strategy he did in Venezuela. What has he done? He cut off their oil exports, their foreign exchange. He’s going to target that leverage point going forward,” Van Eck said.
