WASHINGTON — An island one-third the size of Manhattan controls virtually all Iranian crude oil exports — and experts say its fate could be essential to President Trump’s endgame with Tehran.
Kharg Island is located about 16 miles off the Iranian coast in the Persian Gulf, making it difficult to defend and easier to isolate — reportedly drawing the attention of administration planners.
“Kharg Island handles roughly 90% of Iran’s crude oil exports. Take it out, and this means cutting off the military budget in addition to pulling the plug on the basic services that keep Iranian society functioning,” said Mohammed Soliman, a senior fellow at the DC-based Middle East Institute.
“Losing Kharg for even a few weeks will create a security and societal crisis in Iran at the same time. Tehran doesn’t get to choose which one to deal with first,” said Soliman.
“The revenue shortfall would run into the billions monthly. You’d see the currency collapse further, inflation spike, subsidies buckle, and this will add more pressure on the country with no quick way to stop the bleeding.”
Iranian oil is heavily sanctioned by the US government, and most oil that departs Kharg is shipped to China.
JP Morgan cautioned in a Monday statement that “a direct strike [on Kharg Island] would immediately halt the bulk of Iran’s crude exports, likely triggering severe retaliation in the Strait of Hormuz or against regional energy infrastructure.”
Oil shipments from the Persian Gulf have slowed to a trickle since the war started on Feb. 28 — causing wild swings in global trading as Trump attempts to coax ships to traverse the Strait of Hormuz with a new reinsurance program and offers of US military escorts.
The possibility of a US mission to seize Kharg was first reported by Axios.
The island’s economic importance could give Trump leverage, said former administration official John Ullyot, who has served in defense roles including at the National Security Council during Trump’s first term.
A US raid to capture Kharg would be “high-risk, high-reward,” Ullyot said.
“To take such a high percentage of the Iranian oil supply off the table would cripple the regime and would also give the US, as it has in Venezuela, a big say on where Iran’s oil supply would go,” he said.
“This is the whole source of their economy.”
Trump has repeatedly referenced Venezuela since launching the Iran war — regaling his audiences on how he captured dictator Nicolas Maduro and swapped him out for his more pliable vice president Delcy Rodriquez, who agreed to send oil to the US and allow American companies into the sector.
Ullyot said that Trump clearly understands the pitfalls of an occupation of Iranian territory and that “boots on the ground” may not be needed due to the island’s location.
“One option would be to do a naval blockade of the island,” he said.
“President Trump can essentially seize the island by having an aggressive blockade of the island, [which] he could use down the line to essentially make the Iranian oil supply subject to his call… It would also give him leverage to influence who would be, ultimately, the next leader or interim leader of Iran.”
Trump said Monday afternoon that he believes the war is “going to be finished pretty quickly.”
“I think you’ll see it’s going to be a short-term excursion,” the president said.
“So the rest is going to be a determination as to my attitude, along with the people in the Trump administration, what we want to do.”