Bessent Predicts Strait of Hormuz's Oil Traffic Will Dry Up in Two Years

US Treasury Secretary Scott Bessent believes that the Strait of Hormuz, a critical waterway for Persian Gulf energy exports, will become 'worthless' in two years due to the development of oil pipelines. Speaking at a gathering of global finance chiefs in Asheville, North Carolina, Bessent stated that the strait's importance will be bypassed by these new infrastructure projects.

The Strait of Hormuz has been a point of contention between Iran and the US, with recent hostilities including tit-for-tat strikes on Monday. Two tankers attempting to exit the strait were struck by projectiles, according to maritime security consultant Marisks.

In response to these tensions, the Treasury Department has taken a more central role in the conflict, with Bessent announcing plans to expand sanctions on financial institutions and other entities that still do business with Iran. The US has already moved against United Arab Emirates branches of Egypt's second-largest bank, Banque Misr, which have done $1.8 billion of business with Iran over the last two years.

Bessent hinted at further sanctions, stating that the US will 'probably' announce the sanctioning of another bank this week and a further one next week. The Treasury is also exploring ways to economically isolate Iran, including targeting aircraft leasing companies.