Iran’s oil exports from Kharg Island have increased despite the war with the US and Israel raging, Iranian media claims.
“Following the visits carried out and meetings held on Kharg island, I must say that in recent days not only have oil exports not decreased, but they have increased,” ISNA news agency quoted Moussa Ahmadi, the head of the Iranian parliament’s energy commission, as saying.
Kharg Island’s importance to Iran for its oil business is undeniable, and there seem to be growing threats from the United States to either attack Kharg, occupy it, or damage it to force Iran to capitulate and suffer economic harm.
How important is Kharg Island for Iran’s national strategy?
According to analysts, Kharg is very important to Iran, as it is the foundation of its oil economy and a strategic outpost given its position in the Persian Gulf. The 20 sq. km island lies 28 km southwest of Iran’s coast. It is Iran’s major terminal for oil exports.
It is the fulcrum of Iran’s global crude oil shipments. It has extensive infrastructure for oil processing and exports. This makes Kharg an important part of Iran’s strategic and economic posture. Despite sanctions imposed by the United States and others, Iran continued its oil exports from Kharg Island and increased oil revenues.
The infrastructure that brings crude oil from Iran’s oil fields on the mainland to the island is tightly controlled by a centralized Iranian command structure. Pipelines have been laid from major oil-producing areas, which then all coalesce on Kharg Island, where massive storage tanks for 30 million barrels and deep-sea oil terminals have been built, allowing Iran’s Kharg Island to handle Very Large Crude Carriers (VLCCs).
There is hardly any other facility on the Iranian coast that has such infrastructure development or maritime access, which contributes to the strategic importance of Kharg Island. Consequently, Kharg is Iran’s major economic powerhouse and its gateway to global oil trade. Since Kharg is the centerpiece of Iran’s oil economy, it also becomes the subject of strategic attention, during which its weaknesses are often exposed.
The complex efficiency of Kharg is not heavily defended and thus can be targeted if the United States decides to attack Kharg Island. It is seen as an immobile and very evident target, which, if destroyed or disrupted, would inflict huge damage on Iran’s oil export capabilities.
Iran has created alternative export routes, including terminals beyond the Strait of Hormuz, but they are much smaller and cannot replace the massive facilities and complex integration achieved at Kharg Island. Kharg is a traditional success story in Iran’s infrastructure, but it can also quickly become a major liability if oil exports from Kharg decrease or halt.
It would negatively impact earnings from oil exports, which in turn would hurt domestic economic stability and raise questions about governance and political legitimacy.
Kharg is located in the north of the Persian Gulf. This increases its strategic value. It is not close to the Strait of Hormuz, lying 660 kms to the north, but oil supplies emanating from Kharg Island have to use the narrow Strait of Hormuz and join the flow of oil tankers from neighboring countries as well.
While Kharg is certainly under Iranian control, as is the Strait of Hormuz, the export of oil through the narrow strait faces constant monitoring and is currently facing the consequences of militarization and reactions to it.
The strategic value of Kharg is circumscribed by issues of maritime security, freedom of navigation, and the emerging balance of naval power in the region.
While Iran has kept Kharg within its multi-layered defense structures and deployed naval units, missiles, and air defenses to protect it, these may have been severely degraded. It nevertheless remains a target because it is an economic and oil hub and a critical Iranian suburb for its own deterrence and others’ offensive strategies.
The difficulty that Kharg faces due to its centralized structures guides much of Iran’s regional strategy. Iran believes that its capabilities for asymmetrical warfare in reaction to attacks on its oil and other critical infrastructure could work effectively.
Iran believes that if exports from Kharg Island are disrupted, it would, in turn, disrupt the oil exports of its neighbors that use the Strait of Hormuz. Therefore, control of the Strait of Hormuz is Iran’s defense strategy, by creating the Hormuz Dilemma for oil buyers and suppliers.
Through this approach, it also hopes to protect Kharg Island. How successful this strategy is will perhaps be seen in the weeks ahead.
Meanwhile, Kharg Island remains a critical economic infrastructure that is the subject of US interest and which Iran must resolutely counter and defend. It is also the basis of Iran’s offensive posture towards its neighbors and others by asphyxiating the Strait of Hormuz and causing global oil supplies to be curtailed.
Iran hopes that this concept of mutual assured deterrence between the Persian Gulf and the Strait of Hormuz would prevent an assault on its critical energy infrastructure, unless its enemies are ready to risk a severe curtailment of their own ability to supply oil and gas.
Given President Trump’s 2 April speech, it seems that Kharg Island and a possible ground-force occupation of it remain a US objective, but how that will help open the Hormuz Strait by military means remains uncertain.
Opening the Hormuz Strait and occupying Kharg Island are different military objectives.
For the members of the Gulf Cooperation Council, Kharg Island is a conundrum, causing anxiety and yet cautioning them towards restraint. They recognize that through Kharg, Iran has a long-term role as an energy provider and hence an influencer in the region.
The challenges that Kharg Island faces in defending itself are similar to those posed by the GCC countries’ own energy characteristics. The GCC countries are equally vulnerable because their energy infrastructure is concentrated in a few locations.
In an ideal world, the GCC and Iran should share a common interest in preventing any disruption to the Hormuz Strait and Kharg Island for their mutual benefit, but following the US-Israeli action and the Iranian reaction, the GCC countries have had to reevaluate their strategies.
They are equally concerned about the maritime security of the region as others, so perhaps the GCC countries would have been happier to coexist with a difficult Iran in the present imbroglio, where their association with the US puts them in the crosshairs of Iranian retaliation.
From the US point of view, Kharg is a significant strategic nerve center, which they would like to consider as a point of leverage as they take on Iran. The threat of disrupting Iran’s main oil infrastructure for exports gives them a pressure point that they could have perhaps used, rather than bomb Iran into protracted agony.
The situation is that the US & Israel have bombed mainland Iran repeatedly, but not really touched Kharg Island, perhaps because they are apprehensive that any such move would provoke strong retaliation, as enumerated above, and this would impact not only US assets, but the US partners in the region and the maritime routes and security in the Persian Gulf.
This global impact, which Iranian oil has suffered and has caused suffering to Gulf oil exports, is a matter of grave concern to most countries, 60 of whom had a virtual meeting called by the UK earlier this week.
Price hikes and supply chain instability have affected Asia, Africa, and Europe, which are not directly part of the Iran crisis. Any further attack on Kharg would mean that even if the Hormuz Strait reopens through some miracle, the infrastructure of oil exports would be so deeply destroyed that it would take years to reconstruct.
Possible Iranian retaliation against Gulf infrastructure would then set back the oil clock for a very long time. The doomsday clock in the crisis, therefore, looks at Kharg Island very clearly.
Israel, which seems to be less concerned about other people’s problems emanating from the crisis, sees the strategic perspective of Kharg, based on its larger perspective on Iran’s influence in the region and how it uses its oil revenues to fund its proxies like Hamas, Hezbollah, and the Houthis in the region.
Israel is happier to see the disruption of Kharg so that Iran’s oil revenues are hit for a very long time, constricting their ability to fund their friends in the region. Israel has a greater concern with Iran’s proxies than with the disruption of oil supplies. Israel is perhaps more anxious than the US, but does not feel that its direct action against Kharg and its escalatory steps in the region would necessarily cause it concern if it could curb the role of Hezbollah, Hamas, and the Houthis
Action against Kharg Island, by Israelis, is possible as it views Kharg not only as a target for the present, but sees it as an opportunity to strategically attack Iran’s economic nerve center and beggar it.
Evidently, Kharg Island is at the heart of the contradictions that Iran’s position in the Persian Gulf and the Straits of Hormuz presents to the region.
These are important oil supply lifelines, which by themselves pose great risk if its adversaries believe that attacking Kharg is a better value than the global disruption of supply chains that its destruction will cause.
The sanctions on Iran disrupted its participation in global supply chains, but that participation can resume once the sanctions are lifted. But if Kharg Island is destroyed or captured, it will take a very long time to restore the region’s strategic oil supply lines.
Across the region and its states, Kharg Island is clear evidence that Gulf stability and Gulf anxiety are closely tied, and though it is small, its significance extends far beyond its geography into the realities of geoeconomics and geopolitics.
- Gurjit Singh is a former Ambassador to Germany, Indonesia, Ethiopia, ASEAN, and the African Union Chair, CII Task Force on Trilateral Cooperation in Africa, Professor, IIT Indore.
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