(Bloomberg) — President Donald Trump’s decision to strike Iran creates new risks for a significant chunk of the world’s oil supply.

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The Islamic Republic itself pumps about 3.3 million barrels a day, or 3% of global output, making it the fourth-largest producer in OPEC. But the nation wields far greater influence over the world’s energy supplies because of its strategic location.

Iran sits on one side of the Strait of Hormuz, the shipping lane for about a fifth of the world’s crude from key suppliers including Saudi Arabia and Iraq. Oil and gas tankers have increasingly avoided the waterway following Saturday’s attacks, with Iranian media saying it’s “practically closed.” Ships have piled up either side of the entrance, tracking data compiled by Bloomberg show.

Oil markets are closed for the weekend, and there’s no indication yet that the assault on Iran and the country’s retaliatory strikes across the region targeted any energy assets.

Here are the pressure points to watch in oil as events unfold.

Iran’s Production

Iran’s oil output has risen from less than 2 million barrels a day in 2020 despite continued international sanctions. The country has become more adept at skirting these restrictions, sending about 90% of its exports to China.

The nation’s largest oil deposits are Ahvaz and Marun and the West Karun cluster, all in Khuzestan province.

Iran’s main refinery, built at Abadan in 1912, can process more than 500,000 barrels a day. Other key plants include the Bandar Abbas and Persian Gulf Star refineries, which handle crude and condensate, a type of ultra-light oil that’s abundant in Iran. The capital, Tehran, has its own refinery.

For Iran’s overseas shipments, the Kharg Island terminal in the northern Persian Gulf is the main logistical hub. There was an explosion on the island Saturday, according to Iran’s semi-official Mehr news agency, which didn’t provide more details or make any reference to the oil terminal.

Kharg Island has numerous loading berths, jetties, remote mooring points and tens of millions of barrels of crude storage capacity. The facilities have handled export volumes exceeding 2 million barrels a day in recent years.

US sanctions discourage most potential buyers of Iran’s crude, but private Chinese refiners have remained willing customers, provided they get steep discounts. Tehran relies for its international shipments on a fleet of aging tankers that mostly sail with their transponders deactivated to avoid detection.

Earlier this month, Iran was rapidly filling tankers at Kharg Island, probably in an effort to get as much crude on the water and move vessels out of harm’s way in case the facility was attacked. It made a similar move last June ahead of Israeli and US attacks.

Any strike on the Kharg Island terminal would be a desperate blow for the country’s economy.

Iran’s main natural gas fields are further to the south along the Persian Gulf coast. Facilities at Assaluyeh and Bandar Abbas process, transport and ship gas and condensate for domestic use in power generation, heating, petrochemicals and other industries.

The area is the main point for Iran’s condensate exports. During the June war, an attack on a local gas plant sparked jitters among traders, but didn’t cause a lasting spike in oil prices because it didn’t affect any export facilities.

Regional Dangers

Iran’s supreme leader warned Feb. 1 of a “regional war” if his country was attacked by the US. Tehran has long claimed that a full closure of the Strait of Hormuz is within its power, but it’s an extreme step never taken before — and a nightmare scenario for global markets.

On Saturday, ships reported hearing a radio broadcast purporting to come from the Iranian navy, announcing that transit through the waterway was banned. There’s been no formal announcement from Tehran about the status of the strait, though shipping activity appears now to have largely paused.

Hormuz is the chokepoint for the bulk of the Persian Gulf’s exports of crude, as well as refined fuels such as diesel and jet fuel. Qatar, one of world’s biggest liquefied natural gas exporters, also relies on the strait, and on Saturday it requested that vessel owners halt navigation.

While OPEC members Saudi Arabia and the United Arab Emirates have some ability to reroute their oil shipments via pipelines that avoid Hormuz, closing the strait would still cause a massive disruption to exports and drive up crude prices.

Saudi Arabia and some other producers recently accelerated oil exports as America’s deployment of military assets to the Middle East fueled tensions in the region.

Saudi crude shipments averaged about 7.3 million barrels a day in the first 24 days of the month, the most in almost three years. Combined flows from Iraq, Kuwait and the UAE were set to climb almost 600,000 barrels a day from the same period in January, according to data from Vortexa Ltd.

In the past, Tehran has made retaliatory strikes on some of its neighbors’ energy assets. In 2019, Saudi Arabia blamed Tehran for a drone attack on its Abqaiq oil-processing facility that halted production equivalent to about 7% of global crude supply.

Many observers say it’s improbable that Iran could keep Hormuz closed for long, making lower-impact actions like harassment of shipping more likely.

During last year’s war with Israel and the US, almost 1,000 vessels a day had their GPS signals jammed near Iran’s coast, contributing to one tanker collision. Sea mines are another long-threatened option for deterring shipping.

Market Reactions

Oil surged the most in more than three years during the June war, with Brent crude rising above $80 a barrel in London. However, the gains quickly faded once it became clear that key regional oil infrastructure hadn’t been damaged.

Since then, concerns about an oversupply have dominated global markets, with crude in London ending 2025 about 18% lower than where it started.

Despite those fears of a glut, prices have surged 19% this year, partly due to anxiety around potential US strikes on Iran.

With the main oil futures markets closed for the weekend, there’s limited insight into how traders are reacting to the latest attacks. However, a retail trading product, run by IG Group Ltd., was pricing West Texas Intermediate as high as $75.33, a gain of as much as 12% from Friday’s close.

For global benchmark Brent, the strikes are likely to push the market toward $80 in the “near term” as a “widening escalation cycle” is priced in, Bloomberg Intelligence analysts Will Hares and Salih Yilmaz wrote in a note.

–With assistance from Julian Lee.

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