Key facts
- Iran is fortifying its Kharg Island oil export terminal.
- Kharg Island handles 90% of Iran's oil exports.
- U.S. President Donald Trump has threatened to attack the Kharg Island facility.
- Iran uses a 'shadow fleet' of aging tankers to export oil.
- The 'shadow fleet' circumvents U.S. sanctions.
- Iran's sanctioned oil is often exported to China.
- Tactics used by the 'shadow fleet' include disabling tracking signals and ship-to-ship transfers.
- Japan plans to invest in overseas oil pipeline projects.
- Japan aims to diversify energy import routes away from the Strait of Hormuz.
- Japan's move is a response to geopolitical tensions and supply disruptions.
Iran is accelerating infrastructure projects at its primary oil export terminal on Kharg Island, a facility responsible for 90% of the nation's oil exports. This fortification effort occurs against a backdrop of persistent threats from U.S. President Donald Trump to target the terminal.
To circumvent U.S. sanctions, Iran has developed a 'shadow fleet' of aging tankers. These vessels operate in a legal grey zone, employing tactics such as disabling tracking signals and conducting ship-to-ship transfers to obscure the ownership and origin of their oil cargoes. This practice, often facilitating exports to China, carries significant environmental and geopolitical risks.
In a separate development aimed at mitigating risks associated with geopolitical tensions and supply disruptions, Japan is planning to invest in overseas oil pipeline projects. The focus is on the Middle East, with the goal of diversifying Japan's energy import routes and reducing its reliance on the Strait of Hormuz.