• Treasury Secretary Scott Bessent predicts the Strait of Hormuz could lose strategic importance within two years as new pipelines bypass the waterway.
  • Experts argue that bypass capacity is limited and cannot replace Hormuz's role on that timeline, especially for LNG.
  • The claim reflects a broader U.S. effort to pressure Iran, but current infrastructure and security constraints challenge the 'worthless' assertion.

A Bold Prediction

In a speech in North Carolina, Treasury Secretary Scott Bessent made a striking claim: "In two years, the Strait of Hormuz will be like a worthless piece of water." He argued that 50%–70% of energy currently moving through the strait could shift to underground pipelines, leaving the key Persian Gulf chokepoint "just another body of water." His remarks come amid heightened tensions with Iran and a renewed push to weaken Tehran's leverage over global oil shipping.

Pipeline Push and Reality Check

Bessent's optimism is tied to rapid infrastructure development. The UAE expects a $3 billion expansion of its Fujairah export route to come online next year, and Saudi Arabia is pursuing a larger East–West Pipeline expansion. These projects would strengthen the ability to load crude outside Hormuz. However, the International Energy Agency's senior market analyst, Rebecca Schulz, told NPR that even after major projects are complete, more than 10 million barrels per day could still need to cross Hormuz—about half of historical volumes. Analysts estimate forthcoming bypass projects at 10–12 million barrels per day, versus roughly 20 million that transited before the war. This makes bypass infrastructure a partial diversification measure, not a replacement.

LNG and Other Vulnerabilities

One major gap in Bessent's prediction is LNG. Qatar, one of the world's largest LNG exporters, has no pipeline workaround for seaborne exports. This leaves global gas markets highly sensitive to continued disruption at Hormuz. Beyond oil and gas, the Gulf is crucial for fertilizer and aluminum supply chains; constrained exports can raise farming input costs and affect manufacturing. The IEA also flags links to materials relevant to healthcare and semiconductor supply chains.

Political Context and Implications

Bessent's statement fits into a broader U.S. campaign to pressure Iran. On August 24, Treasury announced sanctions on nearly 60 Iran-linked entities under "Operation Economic Outcast," targeting oil shipments, missile and nuclear activities, and financial networks. The administration has so far emphasized warnings, but China, Turkey, and the UAE—major trade partners with Iran—pose enforcement challenges. Iran retains coercive leverage through shipping threats, and AP reported that Iran has sought payment as a condition for fully reopening the waterway. Negotiations have broken down, and regional risks extend to the Red Sea route, where Houthi attacks have threatened shipping.

The immediate economic impact is clear: disruptions have pushed oil prices above $100 per barrel at times, raising fuel costs for households and industries. Analysts expect elevated oil, gas, and food prices to persist for at least a year. Gulf producers see a reason to build alternative capacity, but expensive pipelines may still be vulnerable to attacks and often rely on other contested routes.

Industry Reactions and Outlook

Asian importers, like Japan, are signaling support for pipeline alternatives, reflecting their exposure to Gulf shipping disruption. Energy companies and investors may benefit from higher prices, while Gulf exporters and LNG buyers face elevated risk.

Bessent's claim of Hormuz becoming "worthless" is a policy prediction, not an established outcome. While Gulf states are actively trying to dilute the strait's importance, current capacity, construction timelines, LNG constraints, and security risks make near-term irrelevance unlikely. The IEA's assessment, echoed by analysts like Robert McNally and David Goldwyn, is that bypasses improve resilience but do not eliminate exposure.

A Strategically Shifting Landscape

In the long term, Hormuz may become less dominant, but it is unlikely to become strategically irrelevant unless alternative infrastructure expands far beyond current plans. The enduring lesson is that infrastructure reduces vulnerability but cannot substitute for maritime security and regional political settlement. As the situation evolves, the focus remains on whether building around Hormuz is a realistic answer or an expensive hedge.