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U.S. Treasury Secretary Scott Bessent declared that the Strait of Hormuz will become "worthless" to the oil industry within two years. Speaking on Fox Business during the G20 finance ministers' summit in Asheville, North Carolina, Bessent emphasized that the strait is not a critical passage for the United States. However, Bessent noted that the strait remains a significant choke point for other countries, with about one-third of the world's crude oil passing through it in 2025, according to the International Energy Agency. In 2024, the U.S. imported about half a million barrels of crude oil daily from Persian Gulf nations through this waterway.
Bessent's comments come amid heightened tensions between the U.S. and Iran, with recent hostilities involving strikes on two tankers exiting the Strait of Hormuz. The Treasury Department has intensified its role in the conflict, planning to expand sanctions on entities conducting business with Iran. Last week, the U.S. targeted the United Arab Emirates branches of Egypt's Banque Misr, which conducted $1.8 billion in business with Iran over the past two years. Bessent mentioned that further sanctions on banks and aircraft leasing companies are expected soon.
Despite criticism, Bessent defended the U.S.'s strategy, stating that "sanctions plus a blockade work" and that the U.S. is effectively isolating Iran economically. He also revealed private discussions with China, a major importer of Iranian oil, to encourage cooperation in isolating Iran. The European Union has expressed readiness to take additional measures to ensure freedom of navigation through the strait.
As the G20 meetings continue, Bessent seeks international support to pressure Iran into negotiations. He aims to collapse Iran's economy within "weeks" or "months" without resorting to military action. However, the U.S. faces challenges in rallying allies due to ongoing trade tensions and the unpopular conflict with Iran.