Bessent: Hormuz Could Lose Strategic Value in Two Years

US Treasury Secretary Scott Bessent has said the Strait of Hormuz could lose much of its strategic importance within two years, as alternative oil pipelines offer new routes for Gulf energy exports. Speaking on the sidelines of a gathering of global finance chiefs in Asheville, North Carolina, Bessent said the waterway would be bypassed in that timeframe, describing it as a potentially "worthless piece of water."

His remarks come amid heightened US-Iran tensions, with the two sides exchanging strikes on Monday. Maritime security consultants reported that two oil tankers leaving the strait were hit by projectiles late that day, renewing concerns about the safety of commercial shipping in the region.

The Strait of Hormuz is a critical chokepoint for global energy, carrying a significant share of oil and gas shipments from producers like Saudi Arabia, Iraq, Kuwait, the UAE, and Iran. Any prolonged disruption could push up global energy prices and add to inflationary pressures.

Bessent also outlined further US steps to increase economic pressure on Tehran. Washington is expected to announce sanctions against another bank this week and an additional one next week. Last week, the US targeted branches of Egypt's Banque Misr in the UAE over dealings with Iran, while deliberately avoiding the parent bank in Egypt. The Treasury is also examining whether to target aircraft leasing companies.

China remains a key focus, as over 90% of Iranian oil exports go there. Bessent said he had held private discussions with Chinese officials about Iran during the G20. He argued that sanctions are more effective when combined with restrictions on Iran's ability to move goods, saying, "sanctions plus a blockade work."