Donald Trump threatened further strikes on Kharg Island, after claiming U.S. strikes Friday had "totally demolished" much of the island.
Speaking to NBC News Saturday, the U.S. President said: "We may hit it a few more times just for fun."
The remarks marked a sharp escalation from Trump, who had previously said the U.S. was targeting only military sites on Kharg and dealt a blow to diplomatic efforts.
His administration has brushed aside attempts by Middle Eastern allies to open talks, three sources told Reuters, as the conflict grows.
Iranian Foreign Minister Abbas Aragchi, in response, said Iran would respond to any attack on its energy facilities.
The islands off Iran's coast have become the latest focus of the war after a U.S strike destroyed military sites last week on Kharg, which is vital to Iran's oil network.
The strike Friday on the island in the Persian Gulf left its oil infrastructure intact and vessels were still seen arriving and loading up with fuel, according to satellite imagery posted Saturday and Sunday by the platform TankerTrackers.
Iran's islands account for only a small share of its territory but have outsized importance because of their oil facilities and strategic location.
"He who controls Kharg Island, controls the destiny of this war," U.S. Sen. Lindsey Graham, one of Trump's close Republican allies, posted on social media Saturday.
The small coral island about 33 kilometers (21 miles) off Iran's coast is the primary terminal through which nearly all of Iran's oil exports pass. Iran has exported 13.7 million barrels since the war started.
Iran gets a significant share of its revenue from oil, with shipments flowing to countries like China. Expanded strikes on Kharg would not only further damage Iran's current government but could also undermine the viability of whatever might eventually replace it.
The island has storage tanks and housing for thousands of workers. Gazelles roam freely near the refineries and depots that make Kharg one of Iran's most valuable – and sensitive – assets.
It is also home to a medieval Portuguese fortress and the ruins of one of the oldest Christian monasteries in the Persian Gulf.
Petras Katinas, an energy researcher at the Royal United Services Institute, said Kharg Island was critical to funding Iran's government and military.
If Iran were to lose control there, it would be difficult for the country to function, even though the island is not a military or nuclear target, he said.
"It doesn't matter which regime is in power – new or old," Katinas said. A takeover would give the U.S. leverage over negotiations with Iran because the island is "the main node" of its economy.
JPMorgan's global commodity research team warned last week in an investment note that a strike on the island would have major economic implications or "immediately halt the bulk of Iran's crude exports, likely triggering severe retaliation in the Strait of Hormuz or against regional energy infrastructure."
Friday's strikes hit more than 90 targets, including air defenses, a radar site, the airport and a hovercraft base, according to satellite analysis by the Institute for the Study of War and American Enterprise Institute's Critical Threats Project.
Iran said the U.S. also struck Abu Musa – one of three tiny islands that have long been a front line in tensions between Iran and Gulf states allied with the U.S.
Iranian forces seized the islands in November 1971, days after the United Kingdom withdrew from the Gulf and just before the sheikhdoms joined to form the United Arab Emirates. Iran maintains military assets and garrisons on the islands.
The territorial dispute over the islands remains one of the Gulf's most persistent flashpoints. U.S. Central Command did not immediately acknowledge Iran's claim of strikes on Abu Musa.
The largest island in the Persian Gulf sits near the Strait of Hormuz and is home to about 150,000 residents. Iranian Foreign Minister Araghchi said the U.S. struck a desalination plant on the island on March 8 – a claim not acknowledged by Washington.
"Attacking Iran's infrastructure is a dangerous move with grave consequences," Araghchi warned in a March 7 post on X. "The U.S. set this precedent, not Iran."
The desalination plant supplied water to about 30 villages.
