Scott Bessent predicts Strait of Hormuz will become insignificant within two years

U.S. Treasury Secretary Scott Bessent has stated that the Strait of Hormuz will become 'insignificant' within the next two years. He predicts that between 50% and 70% of the energy currently transported through the waterway will shift to underground pipelines, reducing the strategic leverage of Iran.

This shift follows joint military operations by the U.S. and Israel against Iran, during which Iran threatened to close the strait and fired upon vessels, causing shipping to stall. Regional players are already seeking alternatives: the UAE is doubling its export capacity via a pipeline to Fujairah, Saudi Arabia is considering expanding its Red Sea pipeline, and the U.S. recently facilitated an agreement between Iraq and Syria to repair a pipeline from Kirkuk to the Mediterranean.

Market analysts have expressed skepticism regarding the speed of this transition, noting that while shipping volumes have dropped to one-tenth of pre-conflict levels, the strait remains vital. Currently, weekly blockades result in global losses exceeding 100 million barrels of oil. While infrastructure development aims to diminish the strait's importance, immediate supply pressures continue to affect global oil prices.