Iran threatens Gulf oil sites after US strikes on Kharg Island

• Trump: Military targets ‘obliterated’
• Kharg handles 90% of Iran oil exports
• Indian ships allowed through Hormuz

The US has carried out strikes on military targets on Kharg Island, Iran’s crude oil export hub, saying its oil infrastructure would be hit next if Tehran continues to block the Strait of Hormuz.

Iran responded that oil and energy facilities linked to US companies across the Middle East would be treated as legitimate targets if its own energy assets were attacked.

As the war in the region enters its third week, the threat to Iran’s economy could send further shockwaves through energy markets.

President Donald Trump posted on Truth Social that the large bombing raid late on Friday had “obliterated every military target” on Iran’s “crown jewel”, but that he had spared the island’s oil infrastructure “for reasons of decency”.

Planet Labs PBC/Handout via Reuters

He warned that the oil facilities would be targeted if Iran continued to interfere with shipping through the Strait of Hormuz.

Iran’s military said that if its energy infrastructure came under attack, oil and economic facilities “that are partly owned by the United States or that cooperate with the United States will be immediately destroyed and reduced to ashes”.

Early on Saturday, some oil loading operations in the port of Fujairah, just outside the strait, were suspended after a drone attack and fire, Bloomberg reported.

Authorities said no injuries were reported, adding that the blaze was caused by “falling debris following the successful interception of a drone”.

Elsewhere, a missile struck the US embassy in Iraq. BBC footage showed smoke billowing from the complex’s helipad.

Tehran’s main source of revenue

Any direct assault on Kharg’s energy infrastructure risks crippling Tehran’s main source of revenue.

The coral outcrop in the northern Gulf, 15 miles off Iran’s coast, handles up to 90 percent of the country’s crude exports. Oil from across the country is transported to Kharg through pipelines, where it is loaded on to supertankers bound for markets including China.

Known as the “Forbidden Island”, Kharg has been loading oil “non-stop since the war broke out”, according to maritime intelligence company TankerTrackers.com. Its energy infrastructure dates back to the 1960s, when it was developed as an export base in partnership with the US oil company Amoco.

Kharg had been avoided during the first two weeks of the conflict. Iranian officials said the bombardment struck air defence systems, a naval base, the airport control tower and a helicopter hangar.

Fars News Agency reported more than 15 explosions on the island. Tehran said the oil loading terminals themselves had not been hit.

Energy markets have been on edge since Iran blocked shipping through the Strait of Hormuz, through which about one-fifth of the world’s oil supply normally passes. The global Brent benchmark closed above $103 a barrel on Friday.

Iran allowed an exception to the blockade on Saturday, with Tehran’s ambassador to India confirming that some Indian vessels had been allowed to sail through the strait.

Speaking in New Delhi, Mohammad Fathali did not specify how many ships had been granted safe passage. 

A sustained spike in global oil prices to about $140 per barrel for two months could be sufficient to tip parts of the world economy into a mild recession, according to an Oxford Economics report. 

The recovery “will be determined by how quickly shipping through the Strait of Hormuz rebounds and how fast oil prices, supply-chain stresses and financial market conditions ease”, it said. 

On Friday Trump said the US campaign would continue for as long as necessary while describing it as “way ahead of schedule”. He also said the US navy would begin escorting ships through the Strait of Hormuz “very soon”.