US Treasury Secretary: Strait of Hormuz Will Become 'Obsolete' in Two Years via Pipelines

U.S. Treasury Secretary Scott Bessent said on September 1 (local time) that the Strait of Hormuz, a vital global energy shipping lane hit hard by the war with Iran, will "become a useless body of water within two years."

Presiding over the G20 Finance Ministers' Meeting in Asheville, North Carolina, Secretary Bessent made the remarks during an interview with Fox News host and former White House National Economic Council Director Larry Kudlow, stating, "That strait will be bypassed within two years."

Secretary Bessent went on to say, "Oil will be transported via land pipelines."

The Strait of Hormuz, a narrow body of water connecting the Persian Gulf and the Gulf of Oman, is a critical chokepoint for international energy transport, through which about 20 percent of the world's crude oil volume passes.

However, following the outbreak of the war with Iran, Iran has exercised control by attacking oil tankers passing through the strait, which caused international oil prices to surge and became the United States' biggest vulnerability.

While the U.S. recently claimed that it has removed or detonated all mines planted by Iran in the strait and that the strait is freely open without Iranian control, tanker traffic remains significantly lower than before the war.

Secretary Bessent's remarks on this day refer to how Middle Eastern oil and gas producers such as Saudi Arabia, Kuwait, and Qatar are actively reviewing plans to build or expand new pipelines as alternative shipping routes to transport crude oil, thereby lowering their dependence on the Strait of Hormuz.

In addition, as part of an "economic pariah operation" against Iran, Secretary Bessent said, "We will probably announce sanctions on one bank this week, and another round of sanctions next week," adding, "We are consulting with our allies on this issue, everyone has stepped up actively, and we are receiving tremendous support."

Previously, the U.S. sanctioned the United Arab Emirates (UAE) branch of Egypt's state-owned Banque Misr on August 28.

The U.S. cut off the bank's access to the U.S. financial system, stating that it processed USD 1.8 billion in illicit funds for front companies linked to Iran's Ministry of Defense and the Islamic Revolutionary Guard Corps (IRGC).

Therefore, Secretary Bessent's remarks indicate that in addition to that, two more banks linked to Iran will be sanctioned.

Secretary Bessent stated that aircraft leasing companies and other institutions that have transacted with the IRGC are also under consideration for sanctions, warning, "Anyone who does business with the IRGC will be subject to sanctions and there will be no leniency. We will economically suffocate this regime."

(Photo: AP, Yonhap News)
※ Please note: This article was translated by AI and may contain errors.