U.S. Central Command confirmed the strikes destroyed more than 90 Iranian military targets on the island, including naval mine storage facilities and missile storage bunkers, while leaving oil infrastructure intact — for now. Announcing the strike on Truth Social, President Trump said U.S. forces had “totally obliterated every MILITARY target in Iran’s crown jewel, Kharg Island,” adding that the island’s oil infrastructure was spared — but could be struck further down the road.
Peter McGuire, CEO of Australia-Trading.com, put it bluntly: “This is a major-major impact. When you are thinking about Kharg Island, 95% of Iranian crude travels through that region and then ships through the Strait of Hormuz and is distributed across the globe.”
Why Kharg Island is the nerve centre of global oil supply
This is not just any target. Kharg Island, a small coral island roughly 21 miles off Iran’s coast, is the primary terminal through which nearly all of Iran’s oil exports pass. The island is described as the “backbone” of Iran’s oil trade infrastructure. Iran earned an estimated $53 billion in net oil export revenues in 2025, representing around 11% of the country’s annual GDP.
Iran produces around 3.2 million barrels per day and exports approximately 1.5 million barrels per day, with about 90% of those exports shipped through Kharg Island.
Markets react: Brent above $104, WTI tops $100
The financial markets have not waited for Monday’s open to signal their anxiety. U.S. crude rose above $100 per barrel, while Brent, the international benchmark, climbed to $104.2 per barrel, up 1.2%.
McGuire warned the rally may not be over: “I would be expecting prices to edge up from here — maybe another $5 to $10. It is very difficult to speculate how high they can go or how quickly.”He recalled the speed of last week’s move: “Last Monday, oil prices boomed to the upside by $20 or $25 in a matter of an hour.”
The Strait of Hormuz: A choke point the whole world watches
The bigger fear now is not just Kharg Island — it is what comes next. Tehran’s ability to disrupt shipping through the Strait of Hormuz, through which one-fifth of the world’s oil cargoes pass, has triggered what is being described as the biggest-ever disruption in the global oil supply, rattling markets and governments alike.
Trump warned that should Iran, or anyone else, interfere with the free passage of ships through the Strait of Hormuz, he would “immediately reconsider” his decision to spare the island’s oil infrastructure. Trump also urged allied nations to deploy warships to help secure the strait, writing that countries receiving oil through Hormuz “must take care of that passage.”
McGuire highlighted the broader regional risk: “You look at the UAE, Kuwait, Bahrain, Saudi Arabia — all of these points and the choke point of the Strait of Hormuz. Tempers are high. The impact geopolitically is immense and this could unravel very quickly.”
Iran’s response: Threats of retaliation against Gulf oil facilities
Tehran has not stayed silent. Iran had threatened to reduce U.S.-linked oil facilities to “a pile of ashes” if oil structures on Kharg Island were attacked.
Iran’s Islamic Revolutionary Guard Corps said it carried out missile and drone strikes on targets in Israel and three US bases in the region, describing the attacks as the first round of retaliation.
JPMorgan warned that a direct strike on Iran’s export terminal would likely trigger severe retaliation against regional energy infrastructure — a scenario that would send oil prices dramatically higher.
What could cool the market?
Despite the tension, analysts see a path to de-escalation — but it is narrow.
McGuire explained: “If things were to become more conciliatory between the U.S., Israel, and Iran — if ships were sailing through, there were no disruptions, and everything moved back to a normal process — that would naturally strip out the war premium, probably $10 to $20 off crude oil immediately.”
As of Saturday, the deputy governor of Bushehr, the port city closest to Kharg Island, stated that “exports, imports and the activities of companies on the island are proceeding normally.” NBC News
But with the conflict now in its third week, having killed more than 2,000 people mostly in Iran Al Jazeera, and Trump threatening further strikes, the market remains on a knife’s edge.
Bottom line for investors and businesses: Oil above $100 is now the baseline. Every development around the Strait of Hormuz, Kharg Island, and U.S.–Iran diplomatic signals in the coming hours will move markets — potentially sharply. Keep a close watch on Monday’s open.