Trump threatens to hit Iran’s oil hub Kharg Island over Strait of Hormuz blockade

The US President has threatened to hit the Iran’s Kharg Island oil hub unless Tehran stopped attacking the oil ships in the Strait of Hormuz and opened the critical chokepoint

The warning has sent shockwaves across the energy markets which are already on edge. If this happens, the world will see skyrocketing oil prices along with historic disruption in supply.

Trump issued a final warning and posted on social media that the US had completely destroyed military sites on the Island.

Although the US strikes did not target Kharg's oil infrastructure, but "should Iran, or anyone else, do anything to interfere with the Free and Safe Passage of Ships through the Strait of Hormuz, I will immediately reconsider this decision," Trump wrote.

According to the US President, Iran has no ability to defend itself, therefore the country should surrender and lay down their arms.

Iran in response had also threatened to hit regional oil facilities in the case of any attack on the country's critical oil and energy infrastructure.

As reported by Iran’s semi-official Fars news agency, more than 15 explosions were heard on Kharg Island during the strikes, but no damage to oil infrastructure was reported.

Investors are closely watching to see if the U.S. attacks damaged the island's complex oil equipment, such as pipes and storage tanks. Even small amounts of damage could make oil harder to get globally, which would cause prices in the unstable market to swing even more.

On Friday, Trump also announced that the US navy will soon start escorting oil tankers through the Strait of Hormuz.

Why is Kharg Island strategically important for Iran?

Kharg Island is a small rocky oil hub just 15 miles off the coast of Iran.

According to security analyst Mikey Kay, Kharg island is a lifeline for Iran as the island that handles 90 percent of Iran’s oil crude shipments and is located about 300 miles northwest of the strait.

It is also home to an export terminal, allowing the tankers that can carry up to 85 million gallons of oil to be able to come up to the terminal and then come back down the Persian Gulf. It is also the passageway to deliver Iranian oil to China.

Kharg Island is also an economic lifeline for Iran Revolutionary Guard Corps (IRGC). In the case of any damage to the island, it means the US is crippling the ability of the IRGC to conduct the war.