US Considers Ground Ops in Iran's Eastern Flank

Lead paragraph

The United States is reported to be preparing potential ground operations along Iran's eastern flank, with sourced coverage citing a leaked plan to seize Kharg Island and related objectives. Reporting published on Mar 24, 2026 (Axios, cited by InvestingLive) describes movements consistent with a buildup of ground forces and an operational timeline that would follow a short, five-day truce referenced by the US administration. The logistics described in open-source accounts point to a roughly 1,000 km transit across hostile waters if amphibious options are pursued, and analysts note Iran's internal geography — commonly cited as roughly 65% mountainous — as a significant impediment to sustained inland operations. These reports raise immediate questions about feasibility, escalation dynamics in the Gulf, and implications for energy markets and allied force posture in the region. This piece synthesizes the available data, benchmarks it against historical operations, and examines likely regional and market implications for institutional investors and policy-makers.

Context

The leak first surfaced publicly on Mar 24, 2026, in coverage that attributed details of an operational concept to US sources and suggested Kharg Island as an objective; Axios reported elements of the plan, and InvestingLive republished those claims the same day (InvestingLive, Mar 24, 2026). Kharg Island is Iran's primary oil export terminal and has strategic value for control of Gulf maritime chokepoints. The administration's five-day truce — announced earlier in March 2026 and framed as a pause in kinetic escalation — is described by some commentators as a window for coalition positioning, re-arming partner states, and degrading Iranian offensive capabilities.

Geography and logistics have immediate bearing on operational choices. To approach Kharg by sea, vessels would need to transit the Strait of Hormuz and traverse an estimated 1,000 km of waters where anti-access/area-denial (A2/AD) systems and Iranian naval forces operate. Overland approaches from Iran's west are constrained by terrain that defined the Iran–Iraq war (1980–1988), a conflict that demonstrated how mountainous terrain can impose attrition and stasis on large-scale ground campaigns. Historical precedent suggests that any plan relying on rapid amphibious seizure followed by sustained inland control would face supply-line, resupply, and force-protection challenges.

Political signaling is a further layer. Public leaks and selective briefings, including those attributed to Axios, can serve dual purposes: preparing domestic and allied audiences for escalation, and shaping Tehran's calculus. For institutional investors, the interaction between signaling, actual force posture, and potential for miscalculation is material because it affects oil-export continuity, insurance rates for Red Sea and Gulf shipping, and the probability of wider regional involvement.

Data Deep Dive

Key datapoints in the public record are sparse but analytically useful. The primary figures circulating in open reporting are: Mar 24, 2026 (date of leak coverage); a five-day truce window referenced by US officials earlier in March 2026; an estimated 1,000 km hostile maritime transit to position amphibious assets; and Iran's commonly cited figure that roughly 65% of its territory is mountainous. Each figure requires qualification: the 1,000 km estimate depends on the embarkation point, and the 65% figure derives from topographical assessments aggregated across Iran's provinces. Nonetheless, these numbers are sufficient to model basic logistical burdens.

Comparative analysis helps frame risk. An amphibious operation attempting to seize and hold Kharg would, by open estimates, require not only Marine expeditionary units but also sustained naval and air suppression of Iranian coastal defenses. Compared with recent US expeditionary operations — for example, limited amphibious raids in other theaters over the past decade — the scale here would be materially larger. If planners anticipate a 30–60 day window to establish a secure logistics corridor, fuel and munitions consumption, medical evacuation capacity, and redundancy in resupply would all scale accordingly.

Open-source intelligence and naval-safety reports also show an increase in insurance premiums and rerouting behaviors following any credible threat to Gulf shipping. Historical market responses to prior disruptions (e.g., 2019 tanker incidents in the Gulf) saw insurance spreads and spot freight rates spike within days; a decisive seizure of Kharg would likely produce immediate market effects, whereas a protracted attritional campaign would affect them over weeks to months. Institutional investors should therefore monitor vessel traffic data, Persian Gulf bunkering statistics, and immediate announcements from shipping insurers for leading indicators.

Regional Implications

For Gulf Arab states and Pakistan, the prospect of US ground operations near Iran's eastern flank raises distinct security and diplomatic calculations. Pakistan's role is complex: Islamabad has historically balanced ties with Washington and Tehran, and any US movement near Pakistan's border would necessitate diplomatic engagement to prevent escalation or unwanted spillover. Gulf Cooperation Council (GCC) partners have emphasized protection of critical energy infrastructure; several have called for stronger defence coordination in recent weeks, with some states reportedly increasing perimeter defenses around export facilities.

Iran's internal mobilization and asymmetric response options also matter. Tehran has a range of tools short of conventional force to raise costs — including attacks on shipping through proxies, cyber operations against energy infrastructure, and disruption of oil and gas facilities. The effectiveness of these tools has precedent: proxy attacks on shipping in the late 2010s and targeted strikes on infrastructure have intermittently reduced export throughput and elevated insurance and logistics costs for shippers transiting the Gulf.

Energy-market participants will track physical throughput. Kharg handles a significant portion of Iran's crude exports; even temporary outages could shave hundreds of thousands of barrels per day from seaborne flows depending on the duration and extent of disruption. For comparison, during the 2019 tanker incidents and successive sanctions cycles, disruptions in the Strait of Hormuz and adjacent terminals produced swings of 0.2–1.0 million barrels per day (mb/d) in effective available seaborne capacity. Such shifts are large enough to influence Brent forward curves, refinery crack spreads, and physical cargo pricing for regional crudes.

Risk Assessment

Operational risk is twofold: tactical execution and strategic escalation. Tactically, the amphibious seizure model faces the classic three-dimensional problem: securing the beachhead, establishing a logistics pipeline across contested waters, and defending against land-based counterattacks within mountainous terrain. Resupply vulnerabilities are acute; a single interdicted resupply line could force operational pause or withdrawal. Strategically, even localized operations risk broader escalation through miscalculation, particularly if Iran interprets a seizure of Kharg as an act that justifies wider or more aggressive retaliation.

Market risk is correlated but distinct. Immediate market sensitivity will be highest for energy and shipping sectors: a credible threat to Kharg or to transit through the Strait of Hormuz historically correlates with a positive shock to crude price volatility and insurance premia for Gulf transits. Credit and counterparty risk for regionally-exposed counterparties — ports, terminals, and some insurers — would also rise. For institutional investors, scenario planning should differentiate between a short, successful precision operation (low-to-moderate market impact) and a protracted campaign or expanded retaliation (high impact, multi-week to multi-quarter effects).

Political risk includes alliance cohesion and domestic politics in the US and GCC states. Leaks and signaling that create divergent expectations among partners can raise coordination costs; if partners refuse to support certain operations, the US could face constraints that change mission scope and duration. Conversely, public pressure to demonstrate resolve can increase the likelihood of action even when tactical conditions are marginal.

Fazen Capital Perspective

Fazen Capital assesses that the public narrative — shaped by leaks and media cycles — intentionally overstates short-term operability to achieve leverage at the diplomatic table. The combination of a five-day truce, highly visible leak channels, and the choice of an objective like Kharg suggests signaling designed to raise deterrence value while preserving escalation options. Our contrarian view is that the most probable near-term outcome is a calibrated increase in forward-deployed forces to posture for contingencies rather than an immediate full-scale seizure.

From a risk-adjusted investor lens, this means monitoring derivatives and physical indicators rather than relying on a single headline. Key signals we would prioritize include tracked movements of specific amphibious assault ships and replenishment vessels, real-time vessel-traffic patterns in and out of the Strait of Hormuz, and insurance-market spreads for Gulf transits. These inputs provide higher-fidelity indication of intent than one-off leaks.

Finally, investors should consider the asymmetric economic consequences: energy-price risk is front-loaded, while supply-chain and insurance impacts can persist. A short-lived kinetic episode that fails to disrupt exports materially will produce transient market reactions; a drawn-out episode could produce secular shifts in trading patterns for regional crude benchmarks and longer-term adjustments in geopolitical risk premia for Middle East exposure. For further context on strategic signalling and asset-level impacts see our research hub on regional risk regional security and on maritime chokepoints Middle East operations.

Outlook

Over the next 30–90 days, the most likely pathway is increased force posture and tactical probes rather than an immediate, sustained seizure of Kharg. Operational constraints — the ~1,000 km hostile maritime transit, the need for sustained resupply, and Iran's mountainous interior (often cited as ~65% of territory) — all argue against an uncomplicated rapid occupation. That said, hybrid tactics aimed at degrading Iranian offensive capabilities while limiting own-force exposure are plausible and could still materially disrupt market expectations.

Scenario monitoring should bifurcate probability-weighted outcomes: a contained show-of-force with limited shipping disruption (base case), an escalatory tit-for-tat phase with intermittent attacks on shipping and infrastructure (medium case), and a protracted ground campaign with sustained export disruption (tail risk). Historical episodes — such as the 2019 tanker attacks and the Iran–Iraq war (1980–1988) — provide boundary conditions for duration and market impacts; the latter demonstrates how mountainous terrain can protract ground campaigns and increase attrition costs.

For institutional clients, the recommended framework is to scenario-test portfolios for oil-price shocks of 5–30% and for extended shipping insurance premia elevated for multiple quarters. While this document does not provide investment advice, such stress-testing aligns risk governance with plausible geopolitical trajectories.

FAQ

Q: Could Pakistan be drawn into operations near its border, and how might that affect outcomes?

A: Pakistan has historically sought to avoid being a battleground between the US and Iran and would likely prioritize diplomatic buffers and border security to prevent spillover. Islamabad's immediate reaction would be driven by domestic politics and bilateral relations; explicit participation by Pakistan is neither assured nor likely absent clear national interest. That said, any cross-border developments that threaten Pakistani territory could force Islamabad into a more active posture, complicating regional dynamics.

Q: How quickly would oil markets reflect a successful seizure of Kharg Island?

A: Markets typically price credible disruptions within hours to days. A seizure that materially reduces exports from Kharg could cause Brent to gap higher within 24–72 hours as physical cargoes are reallocated and risk premia rise. The magnitude would depend on duration: temporary outages might produce a 5–15% spike, while multi-week disruptions could drive larger moves and sustained volatility.

Q: Are non-energy sectors materially exposed to this scenario?

A: Yes. Shipping and logistics firms, regional banks with trade-finance exposure, and insurers writing Gulf transit policies face direct exposures. Secondary effects could reach global supply chains that route through Suez and the Gulf, particularly for time-sensitive commodities and intermediate goods.

Bottom Line

Current public reporting points to a posturing phase with elevated operational risk rather than an inevitable immediate full-scale occupation; logistics and terrain impose meaningful constraints that favour calibrated pressure over sustained ground seizure. Investors and policy-makers should prioritize high-frequency operational signals — vessel movements, insurance spreads, and on-the-ground diplomatic cues — to assess evolving probabilities.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.