As the US and Israeli assault on Iran continues, the Trump administration has issued increasingly belligerent claims that US and Israeli forces are dealing savage blows to the Iranian regime.
US Secretary of Defense Pete Hegseth, warned of the “most intense” day of strikes so far, March 10. And Donald Trump followed it up with a claim that the war will end soon because there is There is “virtually nothing left” in Iran for the US military to target.
All this is part of a campaign that the White House has DECLARING is aimed at “systematically dismantling the Iranian regime’s ability to threaten America, our allies, and global security again.”
Previously, this campaign had primarily targeted Iran’s military and nuclear facilities. But some critical non-military infrastructure had also been attacked. Israel struck two oil refineries and two oil storage facilities near Tehran on March 8, with Iran accusing the US of attacking a desalination plant the same day.
Yet a vital target for Iran’s economic survival, Kharg, its largest export terminal for shipping oil to international markets, remained unscathed until Friday night, when Trump announced on “Social Truth” that the island had been bombed. And even this, by Trump’s account, was not an attack on its oil facilities. (Update from Asia Times editors.)
Only ‘military targets’ are hit
The US, the president wrote, had “completely obliterated any military objective in Iran’s crown jewel”.
US Central Command posted on X a statement stressing, like Trump, that what had been hit were military targets, not the oil facilities themselves:
Last night, US forces executed a large-scale precision strike on Kharg Island, Iran. The attack destroyed naval mine storage facilities, missile storage bunkers and many other military sites. US forces successfully struck more than 90 Iranian military targets on Kharg Island, preserving the oil infrastructure.
Importance of Kharg
The terminal is located in Kharg, a small coral island off the southwest coast of Iran.
Kharg is where oil pumped through Iran’s oil fields arrives via underwater pipelines to be loaded into tankers, mostly headed for China.
At maximum capacity, the terminal’s large storage facilities and multiple gates can handle millions of barrels of oil per day. Kharg makes up a whopping 90% of Iranian crude exports and tens of billions of dollars in annual government revenue.
No other major oil-producing country is so dependent on just one facility. Saudi Arabia, Kuwait and the United Arab Emirates in the Persian Gulf, and massive producers elsewhere such as Russia, Mexico and Venezuela, do not concentrate almost all of their export capacity in a single country.
Iran’s energy lifeline
Kharg Island became the focal point of Iran’s oil industry due to a convergence of history and geography. Nowadays, Kharg is popularly known among Iranians as “forbidden island” due to the strict military restrictions and secrecy surrounding it.
However, behind its modern geo-economic importance lies one ancient historyfrom early human settlements dating back more than 4,000 years to occupation by various empires that recognized its strategic maritime importance as a trading point. The island too housed political prisoners in the mid-20th century, before construction of the modern Kharg terminal began in 1958.
The island quickly became Iran’s dominant export port for two reasons. First, it could be connected by pipeline to major oil fields in southwestern Iran. And secondly, its location in deep water made it one of the only places on Iran’s west coast that could accommodate the new supertankers that were at the time dramatically lowering the cost of oil transportation.
Once the giant storage facilities, wharves and underwater pipelines feeding the terminal were built, centralizing exports there created significant efficiencies. Oil from multiple fields can share the same storage and loading infrastructure, thereby reducing overall operating costs.
Kharg’s dominance of the national oil export system was further strengthened after the Islamic revolution in 1979. This was because regional tensions and Iran’s emphasis on self-reliance discouraged it from using pipelines passing through neighboring countries.
At first glance, Iran’s reliance on one terminal for almost all of its oil exports looks like a major strategic vulnerability. There are also no significant operational challenges preventing the US and Israel from destroying it. Yet, paradoxically, this is precisely why the oil plant itself has not been targeted so far.
Crippling Iran’s entire oil industry for months – if not years – would destroy the already fragile confidence in financial markets that Trump can achieve his vague war aims without long-term disruption to the global economy. some analysts predict that Oil prices could rise to $150 per barrel if Kharg is hit.
To put this figure into context, Russia’s 2022 full-scale invasion of Ukraine caused Brent crude to rise to well over US$100 a barrel for four months. This was not the only cause of about 9% increase in inflation seen at the time, but it was an important factor in the cost of living crisis that followed.
Launching an attack on Kharg’s oil operations would likely expose Trump’s gambit in launching a war against Iran while simultaneously promising American consumers that almost everything would become more affordable as a catastrophic mistake. American voters are showing that inflation and the cost of living are their biggest concerns ahead of the upcoming midterm elections in November.
Of course, Trump’s intervention in Iran could lead to higher prices even if the US does not attack the Kharg oil facility. The most extensive disruption of Gulf shipping in the Strait of Hormuz has already caused oil prices will rise to around $100 per barrel. And in his first statement since becoming Iran’s supreme leader, Mojtaba Khamenei vowed to keep blocking the waterway.
But at least for now, Trump seems to understand that Kharg Island must be left intact if he is to preserve the already shaky notion that he can end this war in a way that he can present as a success — that increasingly looks like degrading Iran, but not forcing it to capitulate — without causing long-term economic pain for Americans.
Another factor preventing the US from destroying Kharg is that it would cause long-term damage to the Iranian economy. This would undermine any claim that Trump is acting in the interests of the Iranian people, as he assertedas any new government would be financially crippled if the regime were toppled.
So Kharg Island survives intact for now. This is, in large part, due to the fundamental contradiction between Trump’s objectives in Iran and the political and economic costs he is willing to incur in pursuing them.
Christian Emery is Associate Professor in International Politics, UCL School of Slavonic and East European Studies, UCLA.
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