Kharg Island (Jazīreh-ye Khārk) is a small coral island in the northern Persian Gulf, approximately 34 miles (55 km) northwest of the Iranian port of Bushehr, and functions as Iran's primary oil export terminal. The island is a geographical feature that has been transformed into a critical economic and geopolitical institution. Its history as a strategic trading post dates back to the Achaemenid period, with control passing through the Portuguese Empire in the 16th and 17th centuries and the Dutch colonial empire in the 18th century.
The island's modern significance began in the 1960s when it was developed into a major crude-oil terminal under Mohammad Reza Pahlavi. This development was necessary because most of Iran's mainland coastline is too shallow for the large crude carriers, or supertankers, used in the oil industry. Kharg's location, however, is surrounded by deep waters, allowing these colossal vessels to dock safely. The terminal was officially commissioned and sent its first major shipment in August 1960.
The mechanism of the island's operation involves receiving crude oil from major offshore fields like Aboozar, Forouzan, and Dorood via a network of subsea pipelines. The facility, which includes the Kharg Terminal and its T-shaped jetty, can load up to 10 supertankers simultaneously and has a loading capacity of about 7 million barrels per day. Kharg Island provides storage for up to 30 million barrels of oil and handles approximately 90 percent of Iran's total oil exports, making it the country's economic backbone.
Kharg Island connects directly to the global energy market and is a key component of Iran's oil-based economy, with most exports destined for Asian markets, primarily China. Its strategic importance was highlighted during the Iran-Iraq War (1980-1988), when Iraqi forces repeatedly bombed the island's oil infrastructure in an attempt to cripple Iran's economy. More recently, in May 2025, Iran expanded the island's infrastructure by rehabilitating tanks 25 and 26, adding two million barrels to the terminal's storage capacity.