US bombs military targets Kharg Island – Why Iran’s ‘orphan pearl’ matters

Kharg Island, where U.S. forces struck military targets on Friday, serves as the gateway for about 90% of Iran’s oil exports and has long been considered a critical weak point that could trigger a strong retaliation from Tehran if attacked, as reported by Reuters.

US President Donald Trump said on social media that the U.S. “totally obliterated every MILITARY target” on Kharg and threatened that oil infrastructure could be targeted if Iran continues to interfere with shipping in the Strait of Hormuz.

Kharg Island — strategic importance

Often referred to as the “orphan pearl” of the Persian Gulf by Iranian writer Jalal Al-e Ahmad, the small coral island has served various roles through history, including a trading hub, place of exile, religious site and strategic military location.

During the Pahlavi era, the island’s role changed notably. Between the 1940s and 1958, Kharg served as a remote penal colony and place of exile for political opponents.

Kharg Island lies about 16 miles (26 km) off Iran’s coast and roughly 300 miles (483 km) northwest of the Strait of Hormuz. The surrounding deep waters allow large oil tankers, too big to reach the mainland’s shallow coastal areas, to dock and load crude, Reuters reported.

Its surrounding deep waters allow large oil tankers to load crude easily, an advantage that much of Iran’s coastline lacks. As a result, the island accounts for a notable share of Iran’s oil exports to international markets.

Data from the US Energy Information Administration shows that about 20 million barrels of oil moved through the Strait of Hormuz each day in 2024, making it one of the world’s most crucial energy corridors. A large share of Iran’s oil passing through the strait originates from facilities linked to Kharg Island, Reuters reported.

Iran, which increased oil production ahead of the February 28 start of the war involving Israel and the United States, has continued exporting crude at a pace of about 1.1 million to 1.5 million barrels per day, according to data from TankerTracker.com and Kpler.

Meanwhile, markets have been closely monitoring whether the strikes caused any damage to Kharg Island’s complex system of pipelines, terminals and storage facilities. Even limited disruptions could further squeeze global supply and heighten pressure on an already volatile oil market.

“You take out Kharg infrastructure, then you take 2 million bpd out of the market for good – not until the Straits get fixed,” said Dan Pickering, chief investment officer for Pickering Energy Partners, as reported by Reuters.

Iran’s armed forces said on Saturday that any strike on the country’s oil and energy facilities would prompt retaliatory attacks on energy infrastructure owned by companies in the region that cooperate with the United States, Iranian media reported.

“I’m very concerned it elevates the temperature and Iran has less to lose and it seems to escalate. Iran when backed into a corner is highly emboldened to act,” said Patrick De Haan, an analyst with U.S. fuel price tracker GasBuddy, as reported by Reuters.

Iran has all but shut shipping through the Strait of Hormuz, through which 20% of global oil flows, mostly to Asia.

Key supply source for China

A major share of the oil exported from Iran through Kharg is shipped to China, the world’s largest crude importer. Beijing has taken steps such as restricting refined fuel exports to safeguard domestic supplies amid disruptions in the Middle East.

According to tanker-tracking firm Kpler, Iranian crude has made up about 11.6% of China’s seaborne oil imports so far this year. Most of these shipments are purchased by independent refiners, drawn by the steep discounts resulting from U.S. sanctions on Tehran.

Iran has exported 1.7 million bpd crude so far this year, of which 1.55 million bpd was shipped via Kharg, Kpler data shows.

Before the war, Iran had ramped up exports to about 2.17 million bpd in February, Kpler data showed. It shipped a record 3.79 million bpd in the week of February 16, the data showed.

Kharg has 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.

Multiple very large crude oil tankers were loading at Kharg on Wednesday, according to satellite imagery reviewed by TankerTrackers.com.

Iran is the third-largest producer in OPEC, accounting for roughly 4.5% of global oil supply. The country produces about 3.3 million barrels of crude oil per day, in addition to around 1.3 million barrels per day of condensate and other liquid hydrocarbons.

(With inputs from agencies)