During the first two weeks of the latest war in the Middle East, as US and Israeli strikes rained down on military and energy facilities across Iran, one site went conspicuously untouched.

Kharg Island is a small, heavily fortified, and strategically valuable island off Iran's northern coast.

If the U.S. follows through on its threats to bomb the oil assets on Kharg Island, the war would likely escalate and oil prices would increase exponentially.

Kharg Island serves as the centerpiece for Iran's oil industry, accounting for roughly 90% of the country’s crude exports.

Kharg Island lies about 15 miles off the coast of Iran in the Persian Gulf and is critical to the nation’s economy. Iran’s energy industry depends on the landmass. It’s where about 90% of Iran’s crude oil exports are processed and millions of barrels of oil are also stored. Pipelines from some of Iran’s biggest oil fields connect to Kharg.

Roughly one-third the size of Manhattan, the island is often described as the "economic lifeblood" of the Iranian state. A 1984 CIA document called the facilities on the island "the most vital in Iran’s oil system,

WTI crude futures rose above $99 per barrel on Monday after earlier climbing as high as $102.40 a barrel to their highest level since July 2022, following US strikes on military sites on Kharg Island as the Middle East conflict entered its third week.

Iranian lawmakers propose tolls on ships using the Strait of Hormuz amid ongoing war tensions. Tehran says countries must pay taxes if they want secure passage through the strategic global oil shipping route.