Energy and Our World

This article originally ran on Forbes.com on March 11, 2026. All rights reserved.

Daniel B. Markind is a Forbes.com energy column contributor. The views expressed in this article are not to be associated with the views of Flaster Greenberg PC.

The Iran War has entered its second week with Iran’s air defenses largely destroyed and much of Iran’s Navy at the bottom of the sea. While the United States and Israel are close to having complete control over the battlefield, the Iranian Regime shows little sign of breaking. That being the case, the question is being raised about whether Kharg Island, the terminus for 90% of Iran’s oil exports, should be captured or destroyed as a next step in the battle.

Without Kharg Island, Iran basically has little to no energy revenue to sustain the country and maintain its resistance to United States and Israel’s attacks. The mammoth facility on Kharg Island can store as much as 28 million barrels of oil, along with loading infrastructure. The facility can load eight or nine supertankers simultaneously. As one oil trader based in Dubai stated, “If it goes offline, Iran’s oil revenues collapse overnight.” (Source). 

Thus, the strategic dilemma for the United States and Israel: Taking over Kharg Island would certainly decimate Iran’s potential energy revenues, but it would also risk exacerbating an international energy crisis elsewhere on the planet. Already, the spot oil price for WTI Crude has spiked from about $65/barrel on February 28 to $90/barrel when this is being written. (Source). Already, Iran has fired missiles at its neighbors, Saudi Arabia, Bahrain, and the United Arab Emirates, likely in an effort to coerce American allies to pressure the United States to end the war. Iran no doubt believes an international energy crisis would only add to that pressure.

Of course, seizing Kharg Island would have an immediate negative impact on Iran as well. According to retired Lieutenant General Keith Kellogg, U.S. Special Envoy for Ukraine, moving on this strategy by the United States and Israel would “basically shut [Iran] off economically,” making it impossible for Iran to support China or Russia with much needed crude from Iran itself. (Source). In this way, not only would the United States increase its chances of success in the Iran War, but it might also strike a blow for Ukraine and possibly Taiwan in the future.

Another option would be simply to block access to the island, thereby depriving the Iranians of any export potential. Energy tankers continued to load at Kharg Island in the first few days after the February 28 attacks, but it is unclear whether that can continue and, if so, for how long..

For the Iranian regime, losing any potential energy revenue would be another serious blow to an already devastated economy. Due to extreme internal mismanagement and years of prior international sanctions, Iran’s overall standard of living has been collapsing. Just days before the February 28 attacks, the BBC issued a report entitled “People are getting poorer: How Iran’s struggling economy is changing how families live.” (Source). According to that report, in the past 12 months, the price of basic necessities has increased in Iran by an average of 60%, and “the cost of an average family food basket is currently eight times what it was five years ago.”

Desperation over the economic ditch the country  has been driven into clearly played a part in the massive internal demonstrations that broke out throughout Iran in January, which were brutally put down by the government. However, this cuts both ways. The Iranian government has shown that, while it is wary of its own people and what they may attempt to do, it will go to just about any lengths to stay in power, including even the mass murder of unarmed demonstrators among its own citizens. Given that brutal reality, one might legitimately ask what benefit could possibly come from further crippling Iran’s remaining economic lifeline?

Should the regime survive, it will essentially have to start over with its entire military infrastructure and capabilities.  This applies not only to its regular army, but to the Iranian Revolutionary Guard Corps, its paramilitary Basij, and Iran’s proxies such as Hezbollah, Hamas, and the Houthis. Restoring everything to its pre-October 7, 2023 status would likely take years and cost billions of dollars – if the current regime can survive at all. 

Therefore, the long-term strategy being taken  by the United States and Israel appears to be that starting over for Iran would be a Herculean task, thereby forcing the regime into a Hobson’s Choice of having to choose between rebuilding its military apparatus and repairing the economy.  Iran will simply not have sufficient resources to do both. Should it prioritize the economy over rebuilding the military, then the United States and Israel are counting on the belief that Iran will no longer be the threat to the United States and the region that it has been for the previous 47 years. On the other hand, should Iran choose to prioritize the military, then the December 2025-January 2026 riots may be only a preamble, as 92 million desperate Iranians will need to decide whether it is better to risk death trying to overthrow the Mullahs than it is to meekly die by starvation or thirst. By taking and controlling Kharg Island, the US and Israel could hasten the moment when Iran must make that decision and make deciding even harder for Iran’s citizens.