US President Donald Trump said American forces struck targets on Iran’s Kharg Island, describing the site as the country’s “crown jewel.” The island is widely considered the backbone of Iran’s oil export system and one of the most strategically sensitive energy locations in the Middle East.

While the reported strike targeted military installations and avoided energy facilities, analysts say any attack involving the island raises serious questions about global oil markets and regional stability.

What is Kharg Island?

Kharg Island is a small island located about 26 kilometers (16 miles) off Iran’s southern coast in the Persian Gulf. Despite its modest size, the island plays an outsized role in Iran’s economy. It hosts the main terminal through which most Iranian crude oil exports leave the country.

Oil storage tanks, export terminals, and tanker-loading facilities dominate the island’s infrastructure, making it one of the most important energy hubs in the region. Because of its central role in oil exports, analysts often describe Kharg Island as Iran’s economic lifeline.

Why Kharg Island is crucial to Iran’s oil exports

Roughly 90 percent of Iran’s crude oil exports pass through Kharg Island’s terminals. Satellite imagery in recent weeks has shown very large crude carriers (VLCCs) loading oil there, even as tensions escalated between Iran and the United States.

Estimates suggest that exports have ranged from 1.1 to 1.5 million barrels per day since hostilities began in late February. This means that any disruption at Kharg Island could significantly affect Iran’s ability to sell oil internationally.

How the oil export system works

The island connects to several of Iran’s largest offshore oil fields through pipelines.

Major fields supplying the terminal include:

• Aboozar oil field
• Forouzan oil field
• Dorood oil field

Crude oil from these fields flows to the island, where it is either stored in large tanks or loaded onto tankers for shipment to international markets.

Why is the island called the “most vital” part of Iran’s oil system

The strategic importance of Kharg Island has long been recognized. A declassified 1984 assessment by the Central Intelligence Agency described the island’s oil infrastructure as “the most vital” component of Iran’s petroleum network.

Several factors explain that assessment:

• Massive oil storage capacity
• Direct pipeline connections to major fields
• Specialized facilities for loading supertankers
• Central role in Iran’s export revenue

Because oil exports are a major source of income for Iran’s government, the island has long been seen as both a strategic asset and a potential vulnerability.

What energy facilities exist on Kharg Island?

Kharg Island hosts multiple major energy installations that support Iran’s oil production and exports. One of the most significant is the operations hub of Falat Iran Oil Company, which produces roughly 500,000 barrels of crude oil per day.

The island also includes:

• Large crude storage tanks
• Export loading jetties
• Oil processing infrastructure
• Pipeline connections to offshore fields

In May 2025, Iran expanded the island’s storage capacity by around two million barrels after refurbishing several tanks, further strengthening its role as the country’s export gateway.

Why an attack on Kharg Island matters globally

Because Kharg Island handles most Iranian oil exports, a major strike could have ripple effects beyond Iran.

Energy analysts warn that damage to the island’s export facilities could:

• Disrupt global oil supply
• Push crude prices higher
• Increase shipping risks in the Persian Gulf

The island sits relatively close to the strategic Strait of Hormuz, a narrow waterway through which roughly one-fifth of the world’s oil supply passes. Any escalation around Kharg Island could therefore trigger wider tensions in the region’s energy infrastructure.

What experts say about the economic risks

Analysts from JPMorgan have warned that a direct strike on Kharg Island’s energy infrastructure could provoke a severe response from Iran.

Possible retaliation scenarios could include:

• Attacks on oil tankers in the Strait of Hormuz
• Strikes on regional energy facilities
• Disruptions to shipping routes in the Persian Gulf

Such moves could drive global oil prices sharply higher and intensify geopolitical tensions.

Why Kharg Island has rarely been attacked

Despite its importance, Kharg Island has historically been rarely targeted directly. Even during periods of intense conflict in the region, most attacks have avoided the island’s core export infrastructure due to the potential impact on global energy markets. That is why the latest claims of strikes near the island have drawn particular attention among energy analysts and geopolitical observers.

TL;DR

Kharg Island is Iran’s primary oil export hub, handling about 90 percent of the country’s crude shipments. Located in the Persian Gulf, the island connects major offshore oil fields to global markets and contains large storage and export facilities. After Donald Trump said US forces struck targets there, analysts warned that any damage to the island’s infrastructure could disrupt oil supply and push global prices higher.