US Treasury Secretary Bessent says Strait of Hormuz could become ‘worthless’ in two years

US Treasury Secretary Scott Bessent warned on September 1 that the Strait of Hormuz could become largely irrelevant within two years as oil pipelines offer alternate pathways for energy shipments from the Persian Gulf. Speaking at a global finance conference in Asheville, North Carolina, Bessent stated, "The Strait of Hormuz will be like a worthless piece of water in two years."

His remarks came amid heightened tensions between the United States and Iran after a series of attacks on Monday. Two oil tankers attempting to pass through the strategic waterway were hit by projectiles, according to maritime security consultant Marisks. The Strait of Hormuz is a critical energy chokepoint, handling substantial oil and gas shipments from Gulf producers and Iran's control over it has become a contentious issue in the ongoing conflict.

Bessent also outlined further economic measures the U.S. is contemplating to further pressure Tehran, mentioning additional sanctions against another bank expected within the week, following recent actions against Egyptian and UAE banks. He clarified that the U.S. avoided sanctioning the parent bank in Egypt to prevent reverting to the Egyptian parent.

Additionally, the Treasury is exploring the possibility of targeting aircraft leasing companies to further isolate Iran economically. China's involvement in Iran's oil trade remains a significant challenge for Washington, as over 90% of Iranian oil exports go to China, but the U.S. has refrained from similar actions against China.

Bessent defended the administration's strategy, emphasizing that sanctions combined with blockades prove more effective than sanctions alone. He stated, "Sanctions plus a blockade work. We are burying the head of the Iranian snake." The recent attacks have heightened concerns about the safety of commercial shipping through the Strait of Hormuz, which connects the Persian Gulf, the Gulf of Oman, and the Arabian Sea, playing a vital role in oil exports from several Gulf countries. Any prolonged blockade could lead to increased global energy prices and fuel inflation.