“I’d go in and take it.” The “it” is Kharg Island and the “I” is Donald Trump, but his comment on the critical Iranian oil terminal was made back in 1988 when he was just a businessman. Four decades later the US president is mulling whether to make good on that old boast in what would be a major escalation of the US-Israeli war with the Islamic Republic. Now, as then, the idea that capturing the site would somehow subdue Tehran is fanciful.
Let’s put aside whether taking it — and, crucially, holding it — is feasible. Back in the late ‘80s Trump thought it would easy: “One bullet shot at one of our men or ships and I’d do a number on Kharg Island.” After bombing military targets on the island earlier this month, he’s keeping his intentions on whether to go further to himself. The White House seems to think the terminal could be a bargaining chip to force Iran to reopen the Strait of Hormuz. “I may have a plan or I may not,” Trump said on Friday when asked about capturing Kharg.
Even without debating the perils of putting American troops on the ground in Iranian territory, it’s worth considering what Kharg Island provides exactly and its value to the regime in Tehran.
Contrary to common wisdom, Kharg — about half the size of Manhattan and roughly 25 kilometers (15.5 miles) from the Iranian mainland — isn’t the only spigot for the Islamic Republic’s vast petroleum industry. Tehran has other oil terminals. Sure, none matches the island’s capacity, but in an emergency they would provide alternative outlets that would let Iran export some barrels. While it may not be much, even a little can make a difference during wartime.
Typically, Kharg accounts for 90% of Iran’s crude exports, which usually hover at about 1.7 million barrels a day. The island benefits from proximity to the country’s giant onshore oilfields, deep-water berths, huge storage capacity and the ability to load tankers fast. That’s why Iran favors it. On Sunday, the Islamic Republic was loading three tankers at Kharg Island, according to a satellite image from the European Union’s Copernicus Sentinel-2 platform. The terminal is the only one in the Persian Gulf that is still loading tankers.
But Iran has other crude terminals such as Jask, which importantly is in the Arabian Sea just beyond the contested Strait of Hormuz. It recently loaded a tanker there, and the regime could probably export about 300,000 barrels from it daily. Other terminals include Lavan Island, Sirri Island and Qeshm, all of them inside the Persian Gulf. They export less but could probably manage 200,000-300,000 barrels a day combined.
Even together these sites do not come close to matching Kharg. At best they can probably do a quarter of what the island offers. And yet Iran could use them to keep a smaller flow of oil moving, probably enough to sustain its war effort. If we have learned one thing from years of US “maximum pressure” on the Iranian oil industry, it is Tehran’s resourcefulness. When backed against a wall the regime typically surprises to the upside on oil.
The country also exports other oil stuff known as natural gas liquids (NGLs), a prized feedstock in the petrochemical industry. And it sells important refined products such as fuel oil, liquefied petroleum gas, and naphtha. Put them together and that’s another million barrels a day, mostly from a combination of three terminals: Assaluyeh, Bandar Mahshahr, and Abadan. They bring in billions of dollars every year, and receive far less attention than Kharg. NGLs are Iran’s most lucrative exports after crude oil and natural gas.
To truly choke Iran’s petrodollar — or petroyuan — lifeline, Trump wouldn’t just have to capture Kharg; he’d need to take other terminals too, and do so simultaneously. Anything else would leave Iran able to export some oil. History shows us it can weather long periods of low petroleum exports.
Crucially it entered the war from a position of resource strength, with total oil liquids output at a 46-year high of nearly 5 million barrels a day. This translated into booming overseas sales. Its crude exports rose last month to an eight-year high of 2.2 million barrels a day. Plus it exported another million barrels a day of other oil liquids and refined products.
Despite the financial pain, Tehran didn’t buckle. To expect it to cave in today, even if Trump could force its exports down 90% again, ignores past lessons. And unlike the Islamic Republic, the White House doesn’t have the benefit of time. It needs to reopen the Strait of Hormuz in days or, at worst, weeks. Trump doesn’t have months to crank up the pressure on Iran to accept a deal. By then the global economy would be imploding because of sky-high oil prices.
Of course, the US can stop all Iranian oil exports without having to take over Kharg or other terminals. It can impose an embargo, stopping any tanker carrying Iranian oil. But again I wonder if that would work quickly enough to force Tehran’s hand before crude prices reach unbearable levels. Surely Tehran assumed it wouldn’t be able to export a single barrel in a war with the US.
If anything, its ongoing ability to load tankers and ship them through the Strait of Hormuz unimpeded must be a positive surprise to Iranian military planners. An even bigger gift is Washington lifting sanctions on Iranian oil for 30 days. Going into the war’s fourth week, Iran has exported at least 1.5 million barrels a day of crude and other products. Assume an average price of $80 a barrel, and that’s $2.5 billion I doubt Tehran expected when the bombing began.
By now the Trump administration knows the retaliation threat is real, too. If Iran’s oil infrastructure is attacked, it will respond by hitting energy sites in neighboring countries. Dennis Citrinowicz at the Institute for National Security Studies in Tel Aviv says Iran’s policy is: “Whatever you do to us, we will do to you — and more.”
Kharg has fascinated Trump for 40 years. It’s a shame this doesn’t include a proper understanding of what it offers Iran and how the regime might get by without it. Perhaps that’s why on Friday he threatened the island, and by Saturday he was instead giving Iran a 48-hour ultimatum to reopen the strait or face an attack on its electricity network. As so often with the US president, a failure to grasp history may lead to regrettable decisions.
Source Name : Economic Times