Iran’s most important piece of oil infrastructure has effectively gone offline. Kharg Island, the terminal responsible for the vast majority of Iran’s crude exports, has not loaded a single ocean-going tanker for at least 10 days, according to satellite imagery and shipping data reviewed by Bloomberg.
The cause isn’t mechanical failure or a storm. It’s the US Navy, which has imposed a blockade that has locked down Iran’s entire coastline.
What’s actually happening at Kharg Island
Kharg Island sits roughly 25 kilometers off Iran’s southern coast in the Persian Gulf. Since May 8, it’s been a ghost port.
Satellite imagery has confirmed the shutdown, and the pictures tell a grim secondary story. An oil slick spanning approximately 71 square kilometers has been observed near the facility, with an estimated 80,000 barrels leaked into surrounding waters.
The US military has actively engaged Iranian tankers attempting to breach the blockade. In just nine days, the blockade has impacted an estimated 69 million barrels of crude oil.
The strategic calculus behind the blockade
Kharg Island accounts for over 90% of Iran’s oil shipments under stable conditions. Shutting it down eliminates the primary mechanism through which Iran earns hard currency on the global market.
What crypto markets are pricing in
Crypto prediction markets were showing a 60.5% probability for normalization of traffic through the Strait of Hormuz by April 30. That date has already passed. Liquidity in these prediction markets remains low, so the probability figures should be taken with a healthy grain of salt.
