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PoliticsIran

Kharg Island is ‘the main node’ of Iran’s economy, and a U.S. takeover would provide leverage in any negotiations, energy expert says

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Sam Metz
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March 14, 2026, 10:56 AM ET
A view of the island of Qeshm, which oversees the strategic waterway of the Strait of Hormuz, Iran, on Dec. 24, 2011.
A view of the island of Qeshm, which oversees the strategic waterway of the Strait of Hormuz, Iran, on Dec. 24, 2011. AP Photo/Vahid Salemi
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The islands off Iran have become the latest focus of the war after a U.S strike destroyed military sites Friday on Kharg Island, which is vital to Iran’s oil network.

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The U.S. strike on the island in the Persian Gulf left its oil infrastructure intact, but President Donald Trump warned that if Iran or anyone else interferes with the passage of ships through the Strait of Hormuz, he will reconsider his decision not to wipe it out.

Although they account for only a small share of Iran’s territory, the islands carry outsized importance because of their oil facilities and strategic location.

Here’s what to know about Iran’s islands in the Persian Gulf up to the Strait of Hormuz:

Kharg Island

The small coral island about 21 miles (33 kilometers) off Iran’s coast is the primary terminal through which nearly all of Iran’s oil exports pass. Iran has exported 13.7 million barrels since the war started, and multiple tankers were seen on satellite imagery Wednesday loading at Kharg, according to TankerTrackers.com, maritime intelligence company.

Iran gets a significant share of its revenue from oil, with shipments flowing to countries like China. A strike on Kharg would not only damage Iran’s current government but also could undermine the viability of whatever might eventually replace it.

The island has storage tanks in the south, along with housing for thousands of workers. Gazelles roam freely near the refineries and depots that make Kharg one of Iran’s most valuable — and sensitive — assets.

Petras Katinas, an energy researcher at the Royal United Services Institute, said Kharg Island was critical to funding Iran’s government and military.

If Iran were to lose control of Kharg, it would be difficult for the country to function, even though the island isn’t a military or nuclear target, he said.

“It doesn’t matter which regime is in power — new or old,” Katinas said. A takeover would give the U.S. leverage over negotiations with Iran because the island is “the main node” of its economy.

JPMorgan’s global commodity research team warned this week in an investment note that a strike on the island would have major economic implications.

Abu Musa and the Greater and Lesser Tunb

The three tiny islands have long been a front line in tensions between Iran and Gulf states allied with the United States.

Iranian forces seized the islands in November 1971, days after the United Kingdom withdrew from the Gulf and just before the sheikhdoms joined to form the United Arab Emirates. Iran maintains military assets and garrisons on the islands.

The territorial dispute over the islands remains one of the Gulf’s most persistent flashpoints.

Qeshm Island

The largest island in the Persian Gulf sits near the Strait of Hormuz and is home to about 150,000 residents. Iranian Foreign Minister Abbas Araghchi said the U.S. struck a desalination plant on the island on March 8 — a claim not acknowledged by Washington.

“Attacking Iran’s infrastructure is a dangerous move with grave consequences,” Araghchi warned in a March 7 post on X. “The U.S. set this precedent, not Iran.”

The desalination plant supplies water to about 30 villages.

In Bahrain — home to the U.S. Navy’s 5th Fleet — the Interior Ministry said an Iranian drone had “caused material damage” to a desalination plant there the next day, although water supplies were never disrupted.

Subscribe to Fortune Gulf Brief. Every Tuesday, this new newsletter delivers clear-eyed, authoritative intelligence on the deals, decisions, policies, and power shifts shaping one of the world’s most consequential regions, written for the people who need to act on it. Sign up here.
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