The Strait of Hormuz has long been more than a narrow maritime passage. It is a central artery of the global energy system and a source of strategic leverage in periods of regional tension. U.S. Treasury Secretary Scott Bessent’s assertion that the waterway could become a “worthless piece of water” within two years therefore signals not only a prediction about infrastructure, but also a wider U.S. effort to reduce Iran’s ability to influence regional energy flows.
Speaking on the sidelines of a Group of 20 finance meeting, Bessent said oil exports could increasingly move through overland pipelines rather than through the Strait. He linked this prospect to Washington’s broader economic pressure campaign against Iran, including the prospect of further sanctions on Iranian banks and entities connected to sectors such as aviation, shipping, technology, gold, and digital assets.
A Strategic Message Beyond Energy
Bessent’s comments appear designed to communicate that Iran’s geographic position should not translate automatically into enduring economic or political influence. The Strait connects the Persian Gulf to the Gulf of Oman and is the main export route for oil and gas produced by Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Iraq, Bahrain, and Iran itself. Any effort to make the route less central would therefore alter not only Iran’s strategic calculations, but also the security planning of Gulf producers and their major customers in Asia.
The statement also complements Washington’s recent sanctions escalation. The U.S. Treasury Department’s Office of Foreign Assets Control has expanded the Iranian sectors that may be exposed to secondary sanctions, including shipping and aviation, while issuing guidance on sanctions risks associated with arrangements for passage through the Strait. This approach seeks to raise the costs for companies, financial institutions, insurers, and intermediaries that continue commercial engagement with Iranian linked networks.
Yet the economic message is inseparable from a political one. By suggesting that markets and governments can adapt away from Hormuz, Washington is attempting to reduce the perceived effectiveness of any threat to shipping through the passage. Whether this affects Iranian decision making will depend on the credibility of alternative transport routes, the participation of regional partners, and the willingness of major importers to accept the financial costs of changing supply chains.
Infrastructure Faces Practical Constraints
Available data indicate that replacing Hormuz quickly would be difficult. The International Energy Agency estimates that roughly 20 million barrels per day of crude oil and petroleum products passed through the Strait in 2025, representing about one quarter of global seaborne oil trade. Around 80 percent of these volumes were directed to Asian markets.
By comparison, the IEA estimates that existing alternative pipeline capacity capable of redirecting crude away from Hormuz is between 3.5 million and 5.5 million barrels per day. Operational bypass routes are concentrated mainly in Saudi Arabia and the United Arab Emirates. This capacity could cushion a disruption, but it would not fully substitute for the far larger volume normally transported through the waterway.
The gap is even more pronounced for liquefied natural gas. Qatar and the UAE sent significant LNG volumes through Hormuz in 2025, accounting for nearly one fifth of global LNG trade. The IEA states that there are no comparable alternative routes able to bring those volumes to global markets. Consequently, pipelines may reduce vulnerability for part of the oil trade, but they do not provide an immediate answer for gas exporters and LNG importing states.
Implications for Energy Markets
For Asian importers, the issue is particularly consequential. Nearly 90 percent of total oil and LNG volumes moving through Hormuz in 2025 were destined for Asia. A durable transition toward land based routes could diversify some oil supplies, but it would require major investment, cross border coordination, port expansion, and protection for new infrastructure.
Moreover, rerouting oil on land does not eliminate geopolitical exposure. Pipelines can themselves become vulnerable to technical disruption, conflict, or diplomatic disputes among transit states. The relevant question is therefore not whether Hormuz can be bypassed entirely, but whether governments can build enough redundancy to prevent one route from determining global energy prices.
A Final Note
Bessent’s forecast captures a real strategic ambition: weakening the role of a single maritime chokepoint in global energy trade. However, current pipeline capacity and the absence of viable LNG alternatives suggest that Hormuz is likely to remain economically significant in the near term. The more immediate implication is not the end of the Strait’s relevance, but a renewed contest over infrastructure, sanctions, and the resilience of global energy supply chains.
