JPMorgan Chase stated in a report that if the United States and Israel seize the port of Iran's Kharg Island, Iran's oil exports would come to a halt, its production would be cut in half, and Tehran would likely retaliate by further attacking regional oil infrastructure. The US government has previously discussed plans to take control of the island, which is located about 30 kilometers off the Iranian coast in the Persian Gulf and handles 90% of Iran's crude oil exports.
The report noted that a direct strike would immediately cut off most of Iran's crude exports and could provoke severe retaliation, either in the Strait of Hormuz or against energy infrastructure across the region. Iran is the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), supplying approximately 4.5% of global oil. The country currently produces around 3.3 million barrels per day of crude oil, plus an additional 1.3 million barrels per day of condensate and other liquids.
JPMorgan also highlighted that although Iraqi forces attacked some terminal facilities and tankers during the eight-year war, Kharg Island largely remained operational, with damaged facilities often repaired quickly. This suggests that disabling the island would require sustained, large-scale attacks. The island collects crude via pipelines from several of Iran’s largest oil-producing regions, including Ahvaz, Marun, and Gachsaran.
According to JPMorgan data, ahead of a potential US-Israel strike, Iran has increased exports from Kharg Island to near-record levels. Loadings between February 15 and 20 exceeded 3 million barrels per day, nearly triple the usual export rate of 1.3 to 1.6 million barrels per day. Data from Kpler shows that Kharg Island has storage capacity of around 30 million barrels, with about 18 million barrels currently stored—equivalent to roughly 10 to 12 days of shipments under normal export rates.
Oil prices surged to $119 per barrel on Monday as production cuts spread across the Middle East, affecting Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates.
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