Kharg crisis could disrupt 90% of Iran oil exports, warns Rystad

A potential strike on Kharg Island’s oil infrastructure could see a catastrophic drop in Iran's crude exports, with Rystad Energy warning of a possible 80 to 90% reduction in shipments should the facility be targeted in renewed conflict.

Tensions in the Middle East have been exacerbated by the recent US military action against Kharg Island, Iran's primary crude oil export hub in the Gulf.

It is likely the operation deliberately bypassed oil export facilities to avoid immediately disrupting global crude flows and triggering another spike in commodity costs.

“Even a brief period of restricted tanker movement tightens balances immediately -- Iranian exports demonstrate heightened sensitivity to geopolitical risk, with Iran ramping up oil exports to 2.1 million barrels per day (bpd) in preparation for the sharp decline they knew would happen after the US strike,” Aditya Saraswat, MENA research director at Rystad Energy said in an emailed commentary. 

Iranian exports typically fluctuate between 1.2 and 1.6 million barrels per day (bpd), according to Rystad’s analysis.

However, notable spikes in exports have been observed during periods of heightened external risk.

For instance, in June 2025, exports briefly exceeded 2 million bpd, the Norway-based intelligence energy agency said. 

This occurred when the US and Israel targeted Iranian nuclear sites and a refinery at the South Pars natural gas field (the world's largest).

Iran's retaliation targets key bypass infrastructure

Both instances of increased shipments coincided with potential external attacks or broader regional escalation, suggesting Iran moved to accelerate exports while shipping routes were still viable.

Following the Kharg Island attacks, Iran quickly retaliated, targeting the bypass infrastructure keeping Gulf crude flowing.

The March 14 attack on Fujairah port, UAE, is widely viewed as Iran's direct response, aligning with Tehran's earlier threat to strike US-linked regional energy facilities.

Fujairah oil loadings, typically handling 1 million bpd of Murban crude and vital to the UAE's exports, were suspended following a drone attack and fire—the second major strike since the conflict started.

The Ruwais refinery, which processes approximately 922,000 bpd of liquids and mainly handles Murban crude, was targeted earlier in the week, starting on 9 March, the agency said.

“The logic is straightforward. With Hormuz effectively closed, the UAE's ADCOP pipeline to Fujairah and Saudi Arabia's East-West Pipeline to Yanbu represent the last 6.5 million barrels per day of viable export capacity remaining in the Gulf,” Rystad Energy said in its analysis.

Fujairah processes up to 1.8 million bpd via ADCOP, while Yanbu handles up to 5 million bpd of redirected Saudi Arab Light exports.

Yanbu corridor under grave threat via Bab al-Mandeb

The Yanbu corridor is under a distinct but equally grave threat, Rystad said.

To reach Asian markets, crude exported from Yanbu must pass through the Bab al-Mandeb. 

In this area, Yemen's militant group, Houthis has a proven and extensively used strike capability against commercial shipping, a capability they demonstrated throughout 2024 and early 2025.

“Already, of the Middle East's 21 million bpd pre-war base, only 12.5 million bpd remains at current levels, a reduction of 40% in just over two weeks. But the 12.5 million bpd figure is not secure,” Rystad noted. 

“The latest export data also suggests that the region had already been pushing shipments close to recent highs in anticipation of the attacks.”

In January and February 2026, crude exports from Saudi Arabia, Iraq, the UAE, Kuwait, and Oman reached their highest level since early 2023, averaging 16.6 million barrels per day (bpd), data from Rystad showed.

This surge reflects anticipatory loading, possibly in advance of an expected rise in regional tensions.

The UAE contributed to this increase with a record export volume of approximately 3.3 million bpd.

Conversely, Saudi Arabia's exports were estimated at around 7 million bpd, which is 500,000 bpd below the peak it achieved earlier in the decade, the data showed.

Tanker traffic collapses

Disruptions to export infrastructure and transit routes have caused a production loss of over 8.5 million bpd in the region, which is now leading to reduced export flows.

Furthermore, the escalation and subsequent effective closure of the Strait of Hormuz chokepoint have resulted in a sharp drop in tanker traffic.

Despite rising tensions, crude tanker departures remained relatively steady for most of February, typically between 12 and 18 vessels daily, indicating that Gulf producers' export flows were initially maintained, according to Rystad.

“From 1 March onward, departures collapse to just one to two tankers per day, with several days seeing almost no traffic at all,” the agency added.

“If the situation persists, the drop in departures could start feeding through into additional export losses in the weeks ahead, as producers face growing difficulty moving crude out of the Gulf.”