RE: What will 1st of May look like?28 Mar 2026 10:07
This followed Trump's pledge on Monday to delay an attack on Iranian energy infrastructure for five days, to allow for what he described as "very good and productive conversations" and to explore a diplomatic solution to end the conflict.
Still, the U.S. has deployed thousands of additional troops and more warships to the Middle East, according to reports citing defense officials. Those reinforcements will take time to arrive in the region. The Wall Street Journal reported Thursday night that as many as 10,000 additional U.S. troops may be sent to the region.
With that in mind, many oil-market experts now expect the conflict to reach a showdown on Kharg Island, which handles roughly 90% of Iran's crude exports - making it the backbone of Iran's energy industry and, by extension, the Iranian economy.
"Kharg is not just another asset," said Stephen Innes, managing partner at SPI Asset Management. "It is Iran's economic heartbeat."
Crucially, the island sits closer to naturally deep waters in the Persian Gulf. Much of Iran's mainland coast along the Gulf is shallow and silty, and loaded VLCC "supertankers," capable of carrying about 2 million barrels of crude, wouldn't get enough draft to approach the coast.
Iran's gatekeeping of the Strait of Hormuz has meant the country is exporting slightly more oil now than before the war - about 2.1 million barrels of oil a day, versus 2 million barrels a day before the war.
There was a similar spike in exports in June 2025 as the U.S. and Israel attacked Iranian nuclear and military sites. Iranian exports have hovered around 1.2 million barrels a day to 1.6 million barrels a day in recent years.
Given all of that, Kharg Island would be the "cleanest lever" for Washington to apply "maximum economic pressure" on Iran, Innes said in late Wednesday commentary.
The U.S. hit military targets on Kharg Island earlier this month, but left crude infrastructure intact. If the U.S. were to seize loading terminals, pipelines and storage tanks at Kharg, that would represent a significant escalation of the conflict - and send more jolts through the global energy markets. Most investors at the start of the conflict thought it would wrap up quickly, without any U.S. troops on the ground.
Kharg Island could end up being the "landing spot" for troops that Washington has reportedly sent in, said Denton Cinquegrana, chief oil analyst at OPIS. (OPIS is a unit of Dow Jones, which is the publisher of MarketWatch.) Fresh military intervention would keep this conflict going and, at a bare minimum, keep a floor under oil prices, he added.
Oil prices were seeing a bit of a reprieve this week from their stunning climb in March. Week to date, global benchmark Brent crude (BRNK26) and U.S. benchmark West Texas Intermediate crude (CLK26) were trading lower, but are still up about 40% in March.
Prices eased on optimism around Wednesday's 15-point U.S. proposal to Iran for ending the war. Iran's state-run media o
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