Hormuz Bypass Pipelines Won't Replace Strait's Critical Importance

US Treasury Secretary Scott Bessent said the Strait of Hormuz will be 'worthless' in two years, once new pipelines are built that bypass it to transport oil to global markets. He estimated up to 70% of energy would move through pipelines instead. However, analysts disagree, saying the strait remains critical for container shipping and transporting natural gas.

Salih Yilmaz, a senior energy analyst at Bloomberg Intelligence, said 'oil has meaningful alternatives' but LNG and container shipping are harder to replicate. The Strait of Hormuz is likely to remain strategically important beyond the next two years due to its geography.

Gulf countries and Iraq have been investing heavily in building pipelines, with the UAE expanding the 360km Habshan, Fujairah pipeline to double its export capacity from 1.5 million barrels per day of crude oil. Iraq is also working on a pipeline connecting Kirkuk to Baniyas with an initial production of 2 million bpd.