Why Trump's Kharg Island attacks could make the oil crisis worse
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President Trump is zeroing in on a major vulnerability for Iran as the war's risks to the global economy grow increasingly serious.
Why it matters: Trump is ramping up his threats to Kharg Island, where Iran handles most of its oil, as the country maintains a stranglehold over the Strait of Hormuz.
The latest: The president told reporters on Monday that he is considering further strikes to Kharg Island following U.S. attacks this weekend.
- "We can do that on five minutes notice it'll be over, but for purposes of someday rebuilding that country, I guess we did the right thing, but it may not stay that way," he said.
Context: Trump said Friday the U.S. had bombed military targets on the island, but said on Truth Social he had spared Iran's oil "for reasons of decency."
- However, he added that he'd "immediately reconsider this decision" if ships' passage through the strait were blocked and he told NBC News the U.S. "may hit" the island "a few more times just for fun."
Reality check: Compromising Iran's oil infrastructure at Kharg would hurt the broader global energy market.
What we're watching: Trump is imploring allies to help the U.S. open the Strait of Hormuz, but they have largely rebuffed his attempts.
- Representatives for the White House did not immediately respond to Axios' Monday evening request for comment.
Here's what to know:
Strategic importance of Kharg Island
By the numbers: Kharg island is a strategic terminal 15 miles off Iran's coast that handles about 90% of its crude oil exports.
Threat level: A direct hit on Iran's export terminal on the island would shut down most of those exports.
State of play: Iran has exported 1.7 million bpd of crude oil so far this year, of which 1.55 million bpd was shipped via Kharg, per a Reuters analysis of Kpler data.
- China is the primary importer of Iran's oil.
- CNN reported last week that Tehran is considering allowing some oil tankers to pass through the strait, provided the oil cargo is traded in Chinese yuan.
Trump weighs seizure
Context: The U.S. has hit Iranian targets across the country, but it has mostly concentrated its attacks on the shores of the Persian Gulf and Kharg Island.
Zoom in: Trump is drawn to the idea of seizing Kharg Island outright because it would constitute "an economic knockout of the regime" — essentially defunding Tehran, a U.S. official told Axios' Marc Caputo and Barak Ravid.
- Doing so, however, could trigger retaliatory Iranian strikes against oil facilities and pipelines across Gulf countries, particularly Saudi Arabia.
- "There are big risks. There are big rewards. The president isn't there yet and we're not saying he will be," the official said.
Strait of Hormuz blockade
Zoom out: Oil and gas prices are rising amid Iran's blockade of the Strait of Hormuz, which is cutting off a significant share of the world's crude supply.
- Iran is blocking Gulf countries from exporting oil, but allowing tankers picking up Iranian crude to pass freely.
- If the strait doesn't reopen soon and oil prices spike substantially further, it could do meaningful damage to U.S. economic prospects, Axios' Neil Irwin writes.
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