The United States is actively discussing seizing Kharg Island.

Axios reported on 8 March, citing administration officials, that the operation is under review. Kharg is a five-mile-long island sitting 15 to 30 kilometres off Iran’s southern coast. It handles 80 to 90 percent of Iran’s crude oil exports. Roughly 1.5 to 2 million barrels per day flow through its terminals and loading berths into tankers bound for China, India, and the remaining buyers of Iranian crude. It stores approximately 30 million barrels. It funds 30 to 40 percent of the Iranian government’s budget. It pays the IRGC’s salary.

This is not a new idea. The Carter administration drew up contingency plans for Kharg seizure in 1979. They rejected it because the economic blowback was judged catastrophic. Forty-seven years later, the same island, the same calculus, the same red line. Except now 70 to 80 percent of Iran’s air defences are destroyed, three carrier strike groups control the airspace, and the administration that ordered the assassination of a Supreme Leader does not appear to be constrained by the same risk tolerance.

If Kharg falls, the regime’s revenue collapses overnight. Not gradually. Not over months of sanctions pressure. Overnight. The IRGC cannot pay provincial commanders. Proxy funding to Hezbollah and the Houthis dries up within weeks. The economic logic is devastating and clean.

But the military logic is where the catastrophe lives.

The IRGC activated Mosaic Defence doctrine on 28 February. Thirty-one autonomous provincial commands with independent firing authority and pre-delegated launch protocols. These commands do not need Tehran to authorise retaliation. They do not need Kharg’s revenue to maintain short-term operations. They have weapons stockpiled. They have local smuggling economies generating billions. They have coastline facing every Gulf state. And they have the doctrinal mandate to fight independently for as long as it takes.

Seizing Kharg does not end the war. It transforms the war. From a campaign against a state into a campaign against 31 autonomous militias with anti-ship missiles, drone arsenals, and nothing left to lose.

Every one of those 31 commands sits within range of a desalination plant, a refinery, an LNG terminal, or a shipping lane. Kuwait depends on desalination for 90 percent of its water. Bahrain the same. Ras Al-Khair, the world’s largest desalination complex supplying Riyadh, sits on the Gulf coast. A Shahed drone costs $20,000. The interceptor defending it costs $4 million.

Oil markets have not priced this. Brent at $108 reflects the Hormuz insurance closure. Brent at $150 reflects Kharg seizure. Brent above $200 reflects Kharg seizure plus Mosaic retaliation against Gulf energy and water infrastructure with no centralised counterparty to negotiate ceasefire.

Goldman Sachs already raised its Q2 Brent forecast. JPMorgan flagged the $352 billion insurance gap. Neither has modelled the scenario where Kharg falls and 31 autonomous IRGC commands begin systematically targeting every unhardened coastal facility between Kuwait City and Muscat.

Carter looked at this scenario in 1979 and walked away.

This administration is walking toward it.

The market is pricing a military campaign. It has not yet priced the endgame.

Full analysis in the link.