US Treasury Secretary: "Strait of Hormuz Will Be Useless Within Two Years"

"Oil to Be Transported via Overland Pipelines"
Sanctions Considered for Institutions Dealing with the IRGC

United States Secretary of the Treasury Scott Bessent predicted that the strategic importance of the Strait of Hormuz will significantly decline within the next two years. He explained that Middle Eastern oil-producing countries are expanding alternative transportation routes such as pipelines, which will rapidly reduce reliance on the Strait of Hormuz.

Scott Bessent, United States Secretary of the Treasury. 2026.05.13. Photo by Dongju Yoon

On the 1st (local time), Secretary Bessent, who is presiding over the G20 Finance Ministers and Central Bank Governors meeting in Asheville, North Carolina, had a discussion with Fox News host and former White House National Economic Council Director Larry Kudlow. During the interview, Bessent said, "The Strait of Hormuz will be bypassed within two years," and added, "In two years, it will essentially become a useless body of water." He further explained, "Oil will be transported via onshore pipelines."

The Strait of Hormuz, connecting the Persian Gulf and the Gulf of Oman, serves as a key energy corridor, accounting for about 20% of the world’s seaborne oil shipments. However, since the Iran war, Iran has exercised control over the strait, including attacks on oil tankers passing through, resulting in disruptions to oil transportation. This disruption has become a major factor driving up international oil prices.

The United States recently announced that it has removed or destroyed mines planted by Iran in the Strait of Hormuz, declaring that the strait has now been reopened to free passage. However, reports indicate that the volume of tanker traffic remains well below prewar levels.

Secretary Bessent’s remarks are interpreted as being mindful of the fact that key Middle Eastern oil and natural gas producers, such as Saudi Arabia, Kuwait, and Qatar, are accelerating efforts to establish alternative transportation networks that do not pass through the Strait of Hormuz. These countries are seeking to either expand the capacity of existing onshore pipelines or construct new pipelines, thereby reducing their structural dependence on the Strait of Hormuz.

Bessent: "Additional Sanctions on Iran-Linked Banks... We Will Suffocate the Regime Economically"

Secretary Bessent also announced plans for additional economic sanctions targeting Iran. Regarding the so-called "economic isolation operation" led by the United States, he said, "We will probably announce sanctions on one bank this week and another next week," adding, "We are consulting with our allies on this issue, and all of them are actively participating and providing tremendous support."

Previously, on the 28th of last month, the United States sanctioned the United Arab Emirates (UAE) branch of Egypt’s state-owned Bank Misr. U.S. authorities determined that the bank had processed about $1.8 billion in illicit funds on behalf of front companies linked to Iran’s Ministry of Defense and the Islamic Revolutionary Guard Corps (IRGC), and blocked its access to the U.S. financial system.

Bessent’s remarks that day are interpreted as signaling plans to impose further sanctions on banks connected to Iran, following the measures taken against Bank Misr.

The targets of the sanctions are expected to go beyond financial institutions. Secretary Bessent stated that aircraft leasing companies and other organizations that conducted business with the IRGC are also under consideration for sanctions, warning, "Anyone doing business with the IRGC can be subject to sanctions."

He further emphasized, "There will be no tolerance," and declared, "We will economically suffocate this regime."

This content was produced with the assistance of AI translation services.