We open the week with more kinetic action around Kharg Island. And oil (WTI) is back in the mid $90s. 

Remember, on August 30, the President posted a video of Kharg Island exploding. It was a fake video made with AI. A week later he posted a second one, captioned "Bye bye, Kharg."

This past Saturday, explosions were heard near the island again.

And today, more sounds of explosions. Oil goes up. 

Let's revisit the importance of this island.

It sits twenty miles off the Iranian coast. And it handles over 90% of Iran's oil exports.

And keep this in mind: On March 13, we destroyed more than ninety military sites on Kharg in a single raid, but left every piece of oil infrastructure standing.

Six months later, that remains the case. The oil infrastructure is all intact.

Why?

You don't destroy the asset you intend to take.

As we've discussed, Trump has been talking about taking Iranian oil since 1987, when he told Barbara Walters that America should go in, grab one of their big oil installations, and keep it.

In 1988 he named the island to The Guardian. In March of this year he told the Financial Times his favorite option is to take the oil in Iran, and on the 30th he suggested seizing the terminal outright.

Which brings us to what happened in Caracas last week. It's the next stage in the Venezuela model we've been discussing. 

On January 3, the United States captured Maduro in a military raid and took control of Venezuela's oil exports. On August 28, Trump announced American majority control of more than 65 billion barrels of proven Venezuelan reserves, and called it the biggest oil deal in world history.

Three days later the White House published the plan to build what it called "new robust, strategic and defensible supply chains in our hemisphere."

On September 1, Venezuela's National Assembly approved it. 

That same night, U.S. Energy Secretary Chris Wright landed in Caracas. And on September 2, the Venezuelan government signed deals to turn over the operation of 17 oil fields holding roughly 65 billion barrels of proven reserves to a private company. And that company granted the United States Department of Defense a 35% stake.

This deal puts the operation of a reserve base 40% larger than everything the United States has proven under its own soil into American hands, with the Pentagon holding a third of the operator.

Now, apply this model to Iran.

Kharg isn't a target. It looks more like the last piece of the operation. Take the island, bring professional operators into the fields. Control the flow of oil and the flow of revenue, and the regime can't fund itself back into existence.

And that shifts the global power dynamic of oil. For fifty years, the ability to withhold barrels has been the leverage used to wield global power. OPEC had it. Russia had it. Iran has been trying to use it in the Strait of Hormuz all year.

That oil will very likely (soon) be supplied on American terms.