Trump Floats Seizing Iran's Kharg Island Oil Terminal Amid War Diplomacy

President Donald Trump told the Financial Times on March 30 that the United States could "take the oil in Iran" and seize Kharg Island, the country's primary crude export terminal in the Persian Gulf. "Maybe we take Kharg Island, maybe we don't. We have a lot of options," Trump said, adding that critics of the idea were "stupid people." [1] The remarks come five weeks into a military conflict with Iran and amid a fragile diplomatic process that had, until recently, shown signs of progress.

The statement is not an offhand remark. It reflects a longstanding Trump doctrine — articulated repeatedly since his first presidential campaign in 2015 — that the United States should claim the oil resources of countries it has fought. But this time, the doctrine is being tested against a live military situation, a functioning (if strained) diplomatic track, and a global oil market already in crisis. The question is whether the Kharg Island threat is a negotiating tactic, a genuine military plan, or something in between — and what each of those scenarios means for the Middle East and the world economy.

Kharg Island: Iran's Economic Jugular

Kharg Island is a small coral outcrop roughly 16 miles off Iran's southwestern coast in the Persian Gulf. It handles over 90% of Iran's crude oil exports and has a loading capacity of up to 5 million barrels per day, though actual throughput in recent years has been closer to 1.5–1.85 million barrels per day [2][3]. The island's tank farm can store up to 30 million barrels of crude [3].

Source: Kpler / EIA / Reuters estimates

Data as of Mar 28, 2026CSV

Iran's 2025–26 national budget projected daily oil exports of 1.85 million barrels, with total oil and gas export revenues estimated at roughly $33.5 billion [4]. Of that, one-third — approximately $12.4 billion — was allocated directly to the armed forces and military projects, a figure that tripled from the previous year [4]. An additional 51% of total oil and gas revenues was earmarked for the Islamic Revolutionary Guard Corps (IRGC) and law enforcement [5]. Seizing or destroying Kharg Island would, at a stroke, eliminate the vast majority of Iran's oil export revenue — the single largest source of funding for both its conventional military and its network of regional proxies.

China is the dominant buyer of Kharg Island crude, importing roughly 1.5 million barrels per day in 2025 and early 2026 [3]. Around 84% of shipments head to Asian markets, with India as a secondary customer [6]. In the weeks before the February 28 military strikes, Iran accelerated exports, with shipments reportedly exceeding 3 million barrels per day between February 15 and 20, suggesting Tehran was bracing for disruption [3].

The Legal Void

No credible legal framework authorizes the seizure of a sovereign nation's civilian infrastructure during a conflict in which Congress has not declared war. International law scholars have identified multiple barriers.

Article 2(4) of the UN Charter prohibits "the threat or use of force against the territorial integrity or political independence of any state" [7]. The Fourth Geneva Convention, ratified by the United States in 1955, explicitly forbids pillage — defined as "all forms of unlawful appropriation of property in armed conflict" — and the U.S. War Crimes Act of 1996 makes grave breaches of the Geneva Conventions punishable under domestic law [8]. Oona Hathaway, a professor of international law at Yale, has described the broader pattern of U.S. territorial actions under the Trump administration as violations where "the unwillingness to call this illegal is a terrible mistake" [9].

The International Emergency Economic Powers Act (IEEPA) does allow confiscation of foreign property when the United States is "engaged in armed hostilities," which could provide a theoretical domestic legal hook [10]. But this statute was designed for financial assets, not physical territorial seizure. The distinction between freezing bank accounts and occupying a sovereign island with military forces is substantial. Even proponents of broad executive war powers have not identified a precedent for seizing and operating a foreign government's oil infrastructure as a U.S.-controlled asset.

The Washington University in St. Louis published an expert analysis in January 2026 stating plainly that "international law forbids forcible seizure of territory" [11].

'Take the Oil': A Recurring Doctrine

Trump's Kharg Island remarks are the latest iteration of a position he has held for over a decade. During his first campaign in 2015, he argued the United States should have seized Iraq's oil as "spoils of war." In a 2016 presidential forum, he told NBC's Matt Lauer: "It used to be, to the victor belong the spoils" [8]. In 2019, with U.S. forces in Syria, Trump declared "we're keeping the oil" — a statement that ABC News noted "is considered a war crime" [12].

The historical record of U.S. oil seizure proposals extends further back. After King Faisal's 1973 oil embargo, the idea of seizing Saudi oil fields surfaced in U.S. policy circles before being shelved [8]. President Jimmy Carter's 1980 doctrine pledged "any means necessary, including military force" to ensure Middle Eastern oil flows — but framed the commitment as protecting access, not claiming ownership [8].

In Iraq, the closest real-world test case, the United States did not "take the oil." Iraqi oil infrastructure was placed under Iraqi government authority after the invasion, and proceeds were managed through the Development Fund for Iraq under UN oversight. Brookings Institution described Trump's "take the oil" position as "madness," noting it would have required permanent occupation and would have united Iraqis against the United States [13]. PolitiFact concluded that seizing Iraqi oil "was never a viable option" under international law or practical logistics [14].

The Military Calculus

Military analysts broadly agree that initial seizure of Kharg Island is feasible for U.S. forces — but holding it is a different proposition. The Pentagon has deployed two Navy Amphibious Ready Groups with at least 3,000 Marines, along with elements of the 82nd Airborne Division, to the region [15].

The Foundation for Defense of Democracies published an analysis titled "Why seizing Iran's Kharg Island could be a trap of America's own making," warning that the operation would require mine countermeasures ships to clear approaches, air defense batteries to protect against mainland fire, armored vehicles for mined terrain, combat engineers to maintain oil infrastructure, a sustainment brigade to keep the garrison supplied through 350 miles of contested water, and a rotation force of roughly 4,500 soldiers with armored vehicles to relieve the initial Marine force within weeks [15][16].

CNN reported on March 25 that Iran is building up defenses on the island in anticipation of a potential U.S. ground attack [17]. Responsible Statecraft described a seizure attempt as a "suicide mission," arguing the island would be vulnerable to sustained Iranian missile and drone attacks from the nearby mainland [18].

NPR quoted analysts saying the operation "would be risky" even in optimistic scenarios, with naval assets facing Iranian threats in transit and the garrison requiring continuous resupply through contested waters [19].

Allied Opposition and the 'Hormuz Coalition'

Trump has sought to assemble what Axios described as a "Hormuz Coalition" — a multinational force to reopen the Strait of Hormuz, with countries contributing warships, command-and-control support, and drones [20]. Trump warned NATO allies that "if there's no response or if it's a negative response, I think it will be very bad for the future of NATO" [20].

But Gulf Arab partners — the countries most directly exposed to Iranian retaliation — are privately urging the administration against putting boots on the ground at Kharg Island [20]. Their concern is straightforward: occupying the island would trigger Iranian retaliatory strikes against Gulf countries' own oil infrastructure, prolonging and widening the conflict. This private opposition sits in tension with the coalition diplomacy Trump is pursuing, and it raises the question of whether a Kharg seizure would fracture the very partnerships needed to manage the broader conflict.

The diplomatic track, while strained, has not collapsed entirely. As recently as February, Iran's Foreign Minister Abbas Araghchi said "good progress" had been made in indirect nuclear talks mediated by Oman in Geneva, with the two sides reaching "broad agreement on a set of guiding principles" [21]. The U.S.-Israel strikes on February 28 severely damaged that track, and Iranian lawmakers have since pushed for withdrawal from the Nuclear Non-Proliferation Treaty [22]. A Kharg Island occupation would almost certainly end any remaining diplomatic possibility.

The Oil Market Shock

The conflict has already produced serious oil market disruption. WTI crude oil prices have surged from around $55 per barrel in late December 2025 to a high of $98.71 in March 2026 — a 28.6% year-over-year increase [23].

Source: FRED / EIA

Data as of Mar 23, 2026CSV

The Dallas Federal Reserve estimated that the war has so far removed 4.5–5 million barrels per day from global supply, roughly 5% of world production [24]. If the Strait of Hormuz — through which approximately 20 million barrels per day normally flow — were fully closed, the disruption would reach 20% of global supply [24]. The Dallas Fed projected that such a scenario would raise the average WTI price to $98 per barrel and reduce global GDP growth by an annualized 2.9 percentage points [24].

Source: EIA / Dallas Fed

Data as of Mar 20, 2026CSV

The International Energy Agency's 32 member states agreed to release 400 million barrels from strategic reserves — roughly four days of global consumption and about 20 days of typical Hormuz flows [25]. The U.S. Strategic Petroleum Reserve's maximum drawdown rate is 4.4 million barrels per day, and oil takes approximately 13 days to reach domestic markets after a presidential release order [25]. These buffers are finite. Oil executives and analysts warned that the Strait of Hormuz needs to reopen by mid-April or supply disruptions "will get significantly worse" [26].

The Retaliation Calculus

If Iran chose to retaliate against a Kharg seizure asymmetrically — through Strait of Hormuz mining, Houthi escalation in the Red Sea, or proxy attacks on Gulf oil infrastructure — the consequences could dwarf the disruption already underway. Christian Emery, an associate professor specializing in U.S.-Iran relations at University College London, warned that "military success is by no means guaranteed" and there is a "real risk of it spiraling into a far more dangerous" situation [1].

The 2026 Strait of Hormuz crisis has already demonstrated Iran's capacity to disrupt maritime traffic [27]. A complete Hormuz closure would remove close to 20 million barrels per day from the market — 80% of which is shipped to Asia [24]. China, importing roughly 5 million barrels per day through the strait, and India, South Korea, and Japan would face the most severe supply shocks [6][24]. The strategic petroleum reserve releases, while significant, are designed as bridge measures, not substitutes for sustained disruption of a fifth of global oil supply.

The Steelman Case: Threat as Leverage

Defenders of Trump's approach argue that threatening Kharg Island seizure is rational maximalist posturing designed to bring Iran to the table on terms more favorable to the United States. The logic: faced with the loss of tens of billions in annual revenue, Iran's leadership would capitulate and accept stricter nuclear constraints rather than risk permanent economic devastation [1].

This argument has some historical grounding. The Carnegie Endowment for International Peace published an analysis of lessons from the JCPOA negotiations noting that sustained economic pressure — including oil sanctions — was a key factor in bringing Iran to negotiate in 2013–2015 [28]. The RAND Corporation described the JCPOA's legacy as demonstrating that "the combination of sanctions pressure and credible diplomatic offers" could produce nuclear concessions [29].

But the same analyses caution against conflating economic pressure with military threats. The Vienna Center for Disarmament and Non-Proliferation found that the JCPOA's success depended on "compartmentalising important issues" — keeping the nuclear file separate from regional conflicts — and on maintaining unity among negotiating partners [30]. A Kharg Island seizure would do the opposite: it would merge the nuclear issue with a territorial conflict and divide the international coalition.

Negotiators from the JCPOA era have consistently argued that maximalist demands during the talks — such as insisting Iran eliminate all enrichment — were counterproductive and nearly derailed the process [28]. The Washington Institute for Near East Policy noted that Iran's own maximalist negotiating posture was often a "bluff intended to minimize the scope of required nuclear reversals" [31]. The implication is that both sides' maximalist positioning was understood as tactical, not literal — a dynamic that breaks down when the threat involves actual military occupation.

The Conversation published an analysis arguing that "war on Iran during nuclear negotiations undermines the US's ability to talk peace around the world" and that the effects "won't end when Trump leaves office" [32].

What Comes Next

The Kharg Island proposal sits at the intersection of Trump's longstanding "take the oil" instinct, a live military conflict with no clear endgame, and a global energy market already under severe stress. Whether the threat is a negotiating tactic or a genuine operational plan, its effects are already being felt: oil prices above $90, Gulf allies pushing back privately, Iran fortifying the island, and diplomats struggling to keep any channel open.

The historical record offers no example of a successful U.S. seizure and long-term occupation of a foreign country's oil infrastructure. The legal barriers are substantial. The military costs of holding a small island 350 miles inside contested waters, under sustained missile threat from a nearby mainland, are open-ended. And the potential for asymmetric retaliation — from Hormuz mining to proxy attacks across the Gulf — could produce an oil shock significantly larger than the one already underway.

The coming weeks will test whether the Kharg threat produces Iranian concessions, hardens Iranian resistance, or triggers an escalation that neither side can control.