US President Donald Trump on Thursday stated that the United States would strike Iran "very hard tonight" and expressed a desire to eventually seize the export hub of one of the world's largest oil producers. Below are key facts about Iran's energy industry.
Kharg Island
Iran, the third-largest producer in the Organisation of the Petroleum Exporting Countries, exports 90% of its crude oil via Kharg Island. The island is situated 16 miles (26 km) off Iran's coast in the northern Gulf, approximately 300 miles (483 km) northwest of the Strait of Hormuz. Flows from Kharg have been suspended in recent weeks due to a US blockade of Iranian oil exports, meaning a US takeover of the island would not immediately impact oil shipments. The US military previously conducted strikes on military targets on Kharg in April, according to a US official, but those strikes did not affect oil infrastructure. Seizing Kharg would allow the US to severely disrupt Iran's energy trade, though Tehran could respond by laying more mines to target shipping, including floating mines deployed from the coast.
Oil Production and Infrastructure
Iran is OPEC's third-largest oil producer, with fields and facilities concentrated in the southwestern provinces of Khuzestan (for oil) and Bushehr (for gas and condensate from the giant offshore South Pars gas field). Iran pumped 2 million barrels per day (bpd) of crude oil in May, down from 3 million bpd in April, according to a Reuters survey of OPEC production. This amounts to around 2% of global supply. Its domestic refineries have a capacity of 2.6 million bpd, per consultancy FGE. In May, Iran's crude and condensate exports dropped to their lowest level in at least six years, slipping below 300,000 bpd largely due to the US blockade, according to shipping data and analysts. Flows averaged around 209,000 bpd in May, Vortexa data showed, versus 1.34 million bpd in April and nearly 1.9 million bpd in March. Fuel exports, including LPG, averaged about 820,000 bpd in 2025, according to Kpler, slightly below 2024 levels. Iran's floating storage in May fell to 147 million barrels from about 190 million in April, Kpler said.
Who Buys Iran’s Oil?
Chinese private refiners are the main buyers. The US Treasury has imposed sanctions on some Chinese refiners for purchasing Iranian oil. China says it does not recognize unilateral sanctions against its trade partners, but its purchases of Iranian crude have declined. Iran has skirted sanctions for years using tactics including ship-to-ship transfers at sea, masking the origin of its oil, and using tankers that hide their locations from satellites. Tehran's demands in its talks with the US include the lifting of sanctions on Iran and recognition of its control of the Strait of Hormuz.
World’s Largest Gas Reserve
Iran produces natural gas from the offshore South Pars gas field, which makes up around a third of the world's largest reservoir of natural gas. Strikes have targeted Iran's production facilities at the South Pars field. Iran restored gas production in May at three offshore platforms in the field that had been forced to halt output. Iran shares the reservoir with major exporter Qatar, which calls its field the North Dome. Sanctions and technical constraints have meant most gas Tehran produces from South Pars is for domestic use. Iran's gas production totaled 276 billion cubic meters in 2024, with 94% consumed in Iran, according to data by the Gas Exporting Countries Forum. Israel attacked South Pars last June and this March, with fires reported and some disruption to operations. The entire reservoir contains an estimated 1,800 trillion cubic feet of usable gas - enough to supply the entire world's needs for 13 years.
