Trump Considers Seizing Kharg Island as Asian Markets Plunge on War Fears

Key Takeaways

• Trump suggests US could seize Kharg Island and take Iranian oil during ongoing conflict.
• Asian stock markets slide as oil prices surge past $115 a barrel amid escalating war.
• Pope Leo XIV warns God rejects prayers of leaders with "hands full of blood."
• Pakistan facilitates indirect talks between US and Iran with support from global leaders.
• Israel expands security zone in Lebanon, citing need to thwart Hezbollah invasion threats.

Donald Trump has told the Financial Times that he is considering seizing Iran's major fuel hub, Kharg Island, as a potential strategy to secure the nation's oil reserves. This bold declaration comes as the Iran-US war intensifies, sending shockwaves through global financial markets. On Monday, Asian stock exchanges slid sharply, with Japan's Nikkei 225 dropping more than 4.5% and South Korea's Kospi falling by 4.3%. The sell-off was driven by fears of a prolonged conflict and a sudden spike in energy costs.

The market reaction is directly tied to rising oil prices, which have surged since the war escalated over the weekend. The price of Brent crude jumped 3% in early Asian trading, surpassing $115 a barrel, while US-traded oil climbed close to 3% to $102.50. Both the United States and Japan are heavily reliant on energy imports from the Middle East, making them particularly vulnerable to this disruption. The crisis is further exacerbated by the involvement of the Iran-backed Houthis militant group from Yemen and the arrival of an additional 3,500 US troops in the region, raising the stakes for a wider Middle East oil crisis.

President Trump, speaking aboard Air Force One, claimed the United States has already achieved "regime change" in Iran. He described the outcome as total, stating, "the one regime was decimated, destroyed, they're all dead... the next regime is mostly dead." Trump cited the death of three successive Iranian leadership groups over the month-long conflict, noting that the current group is "different people than anybody's dealt with before." Despite the violence, Trump maintained a pragmatic outlook, asserting that Iran is likely to make a deal, though he cautioned that negotiations could still end with further military strikes.

In a move that underscores the strategic importance of the region, Trump explicitly floated the idea of taking Kharg Island. He stated to the Financial Times, "My favourite thing is to take the oil in Iran," dismissing critics in the US as "stupid people" who question the strategy. When pressed on the island's defenses, Trump claimed, "I don't think they have any defence. We could take it very easily." He noted that occupying the island would require a sustained US presence, suggesting the military option was being weighed seriously as a means to control the flow of oil.

Amidst the geopolitical maneuvering, religious leaders have weighed in on the morality of the conflict. Pope Leo XIV, addressing crowds at the Vatican for Palm Sunday, delivered a stark message against the leaders waging war. The Pope declared that God "rejects the prayers of those who wage war, but rejects them," quoting scripture that says, "your hands are full of blood." This statement has been widely interpreted as a direct criticism of those involved in the US-Israeli war with Iran, emphasizing that Jesus is the "king of peace" and cannot be used to justify violence.

While the US and Iran have signaled a willingness to negotiate, the process remains complex. Trump revealed that indirect talks facilitated by Pakistan's emissaries are "progressing well," and he expressed confidence that a deal could be made "fairly quickly." Pakistan's foreign minister, Ishaq Dar, confirmed that both Tehran and Washington have "expressed confidence" in Pakistan to host meaningful talks. Dar noted that the group of foreign ministers from Pakistan, Saudi Arabia, Turkey, and Egypt discussed ways to end the war, with the Chinese Foreign Minister and the UN Secretary General also voicing support for the initiative.

Meanwhile, tensions on the northern front are escalating as Israeli Prime Minister Benjamin Netanyahu ordered the expansion of a "security zone" in southern Lebanon. Netanyahu stated the goal was to "definitively thwart the invasion threat" from Hezbollah and stop anti-tank missile fire near the border. While he did not specify the exact boundaries, this move follows strong statements by Defense Minister Israel Katz regarding a potential buffer zone extending to the Litani river, which would place a significant portion of Lebanon under Israeli control. Clashes continue to result in casualties, with five Israeli soldiers killed since the latest incursion, alongside Hezbollah fighters.

The disruption in the region has already forced a shift in global shipping patterns. The Red Sea and Suez Canal route, which once carried 12% of global trade, has seen major shipping companies like Maersk and Hapag-Lloyd abandon it in favor of the longer route around the southern tip of Africa. This decision, made after Houthi threats linked to the Israel-Hamas conflict and renewed attacks, forces companies to absorb higher costs that are ultimately passed on to consumers. As long as the conflict persists, the cost of global goods will continue to rise, adding economic pressure to the already volatile geopolitical landscape.

Kharg Island Strategy and Future Peace Prospects

President Trump's contemplation of seizing Kharg Island represents a drastic escalation in the Iran-US war, potentially turning the conflict into a direct struggle for control of vital energy infrastructure. If the US moves to occupy the island, it would necessitate a long-term military presence, fundamentally altering the balance of power in the Persian Gulf. While Trump remains optimistic about a quick diplomatic resolution through Pakistan, the simultaneous expansion of the Israeli security zone in Lebanon suggests a multi-front reality that could prolong the Middle East oil crisis. The Pope's condemnation and the market's negative reaction indicate that the international community remains deeply concerned about the human and economic toll of the escalating hostilities. Should negotiations fail and the US proceed with territorial seizure, the resulting volatility could trigger a sustained global economic downturn and force a reevaluation of energy security strategies worldwide.