Former President Donald Trump’s recent declarations regarding the seizure of Iranian oil assets have sent significant ripples through global energy markets and geopolitical strategizing. Reiterating a stance he has maintained for over a decade, Trump expressed a distinct desire to “secure Iranian oil,” specifically targeting Kharg Island, a critical export hub.
This long-standing ambition, characterized by experts as a belief in “fossil-fuel imperialism,” highlights a confrontational approach to international law and resource allocation. Patrick Bigger, co-director of the Transition Security Project, a research initiative focusing on climate and geopolitical aspects of militarization, starkly notes, “Trump fundamentally believes the U.S. holds an entitlement to any resource it desires. It’s a ‘might-makes-right’ philosophy that is both morally problematic and strategically miscalculated.”
Market participants eagerly anticipate further statements from Trump regarding the ongoing conflict in Iran. Earlier this week, initial speculation surrounding a swift resolution briefly buoyed equities, as Trump suggested the conflict might conclude within weeks. However, the path to de-escalation remains fraught with significant hurdles. Tehran has articulated a need for ironclad assurances against future aggression to halt its counteroffensive, and the conflict persists.
Recent developments underscore the volatility: a fully laden crude oil tanker recently suffered an attack while anchored near Dubai port. Furthermore, the former president issued a stark ultimatum, stating that if the strategically vital Strait of Hormuz is not “immediately” reopened and a peace agreement not reached “shortly,” the U.S. intends to “obliterate” Iran’s energy infrastructure. This threat encompasses critical facilities such as Kharg Island – the five-mile strip responsible for facilitating 90% of Iran’s oil exports – alongside its power generation plants and oil wells. Iran has, in effect, restricted most commercial transit through the Strait of Hormuz following the outbreak of war in late February, severely impacting global shipping lanes.
Just prior to these statements, Trump informed the Financial Times of his interest in U.S. forces asserting control over Kharg Island and its hydrocarbon reserves. “To be candid, my preferred course of action involves acquiring Iran’s oil,” he stated, dismissing opposing viewpoints as held by “stupid people.”
These unambiguous declarations have, according to Amir Handjani, an energy lawyer and resident fellow at the Quincy Institute for Responsible Statecraft, a think tank advocating for military restraint, “completely discredited” any alternative justifications for the conflict. Handjani, also a partner at Karv Global, emphasizes, “It undermines all other stated reasons for this war, reinforcing the long-held suspicion that U.S. military engagements in resource-rich regions are fundamentally driven by the pursuit of natural resources.”
Trump’s interest in acquiring Iranian oil is not a new concept. Handjani points out that the former president articulated similar intentions decades ago. In a 1988 interview in the UK, promoting his book “The Art of the Deal,” Trump told the Guardian’s Polly Toynbee that as president, he would be “harsh on Iran,” adding, “I’d do a number on Kharg Island. I’d go in and take it. It’d be good for the world to take them on.”
This sentiment extends beyond Iran. During his initial presidential campaign, Trump repeatedly suggested the Bush administration should have seized Iraq’s oil to “reimburse” the U.S. for conflict costs. Handjani dismisses this notion as “asinine,” highlighting the absurdity of framing military intervention as a reimbursable service. Upon entering the White House, a similar strategy emerged regarding Syria, where Trump indicated U.S. intervention granted rights to the nation’s oil, even suggesting Exxon Mobil could spearhead efforts to secure these resources. More recently, in his campaign against Venezuelan President Nicolás Maduro, Trump proposed treating seized Venezuelan oil as a U.S. asset, musing to reporters, “Maybe we will sell it, maybe we will keep it, maybe we’ll use it in the strategic reserves.”
Handjani firmly states that initiating a conflict to appropriate another nation’s natural resources lacks any legal foundation. “International law offers no legitimate pathway for military actions aimed at appropriating a sovereign state’s natural resources,” he asserts. “There is no framework under international humanitarian law or the rules of war that permits such conduct.”
Kharg Island: A High-Stakes Target
The prospect of actually seizing Kharg Island or launching a full-scale assault on this strategic asset presents immense operational and geopolitical challenges. Investors must consider that Iranian missile capabilities have already rendered certain U.S. regional bases inoperable, complicating any offensive action.
Any ground assault on Kharg Island would likely necessitate a highly contested air insertion, with U.S. forces immediately confronting significant resistance and heavy fire. Beyond the immediate tactical difficulties, such an aggressive move would almost certainly provoke a massive retaliatory response from Iran, risking severe destabilization of the global economy, according to Handjani.
“From Iran’s perspective, if 90% of their exports are taken offline, their likely response would be to target and level export terminals and oil-producing facilities across Arab countries in the Persian Gulf,” Handjani warns. Investors should therefore prepare for potentially unprecedented market disruption.
In such a dire scenario, the price of crude oil could “easily surge to $200 or $300 a barrel,” Handjani projects, as vast volumes of global oil and gas supplies become inaccessible for an extended period, possibly years. “We would enter an entirely new paradigm with unthinkable ramifications,” he stresses. “However, given the erratic nature of recent actions, investors must not discount the potential for such drastic measures.”
The escalating conflict has already claimed thousands of lives and triggered the largest-ever disruption to worldwide energy provisions. While populations grapple with the human toll and severe fuel price shocks, fossil fuel corporations – including those that provided substantial campaign donations to Trump – are currently registering significant windfall profits, notes Bigger.
“The longer oil prices remain elevated, the greater the benefits accrue to major oil companies,” he explains. “We are already witnessing this conflict being leveraged as justification to expand domestic drilling operations in the U.S. Therefore, irrespective of any success in acquiring Iranian oil, we are likely to see increased exploitation of oil resources because current market conditions make drilling highly profitable.”
This accelerated extraction risks solidifying global dependence on carbon-intensive fuels, making the transition away from oil and gas more arduous. However, Trump appears to exhibit “no genuine concern for the long-term future,” Bigger concludes. Instead, his statements underscore a deep-seated belief in “fossil-fuel imperialism.” While the U.S. has historically been accused of projecting military power to secure strategically valuable resources, Bigger notes that Trump is now “unabashedly articulating a long-suspected underlying motive.”
“He views fossil fuels as a cornerstone of his domestic industrial strategy, believing that control over oil equates to global influence,” Bigger states. “And he is prepared to utilize extremely hostile tools to disrupt the existing international order to achieve his objectives.” For oil and gas investors, these pronouncements signal a period of extreme market volatility and profound geopolitical risk.
