Will oil hit $150 after US strike on Iran’s Kharg Island and rising Hormuz tensions?

The United States’ airstrikes on Iran’s Kharg Island have pushed the ongoing conflict into a more dangerous phase, raising concerns of a sharp spike in global oil prices as the attack targeted one of the most critical nodes in Iran’s export network. Energy analysts say the developments have increased the risk of supply disruptions in the Persian Gulf, especially as tensions around the Strait of Hormuz continue to escalate.

Kharg Island, a small coral island located about 50 km off Iran’s mainland, is the country’s main oil export terminal and handles nearly 90% of its crude shipments. The island has a loading capacity of roughly 7 million barrels per day and serves as the primary link between Iran’s oilfields and global markets. Because of its importance, the facility had largely remained untouched during earlier phases of the US-Israel military campaign.

US President Donald Trump said American forces carried out a major bombing raid on Kharg Island, targeting military installations while deliberately avoiding oil infrastructure. In a statement, he said US weapons had “totally obliterated every military target” on the island but warned that oil facilities could be hit if Iran interferes with shipping in the Strait of Hormuz.

The decision to spare the oil terminal highlights the economic risks associated with damaging Kharg. Analysts say any direct strike on export facilities could remove a large portion of Iranian crude from the market, tightening global supply and pushing prices sharply higher. Estimates suggest that if the terminal were disabled, Iran could lose much of its export capacity, forcing production cuts due to lack of storage and transport routes.

Analysts at JPMorgan warned that any damage to Kharg Island could severely disrupt Iran’s oil production and exports, as the terminal serves as the country’s main storage and loading hub with very few viable alternatives. The bank said the loss of the facility could force production shutdowns across major oilfields in southwest Iran due to the lack of export capacity.

“With production near 3.3 million barrels per day and exports around 1.5 million barrels per day, as much as half of Iran’s output could be at risk if the Kharg hub remains offline. The export buffer previously estimated at about 20 days could disappear almost immediately,” the analysts said in a note, warning that such a scenario could tighten global supply and push oil prices sharply higher.

The escalation comes as Iran has been increasing pressure on maritime traffic in the Strait of Hormuz, the narrow waterway through which roughly one-fifth of the world’s oil supply passes. Reports of tanker disruptions and military deployments in the region have already caused volatility in crude markets.

Benchmark Brent crude has been hovering near the $100-per-barrel mark since the conflict intensified, with traders pricing in the risk of further disruption. Some analysts warn that if Kharg’s oil infrastructure is hit or if the Strait of Hormuz is partially closed, prices could surge toward $150 per barrel in an extreme scenario.

Strategically, the strike reflects a widening contest between Washington and Tehran. The US is trying to deter Iran from choking global oil flows, while Iran appears to be using the threat of disruption as leverage against countries dependent on Gulf energy supplies.

For oil-importing nations such as India, the situation is being watched closely. Any sustained rise in crude prices would increase import bills, fuel inflation and put pressure on government finances. With shipping routes in the Gulf under strain, energy markets remain highly sensitive to further military action around Kharg Island and the Strait of Hormuz.