World News
US claims planned pipelines will make Strait of Hormuz irrelevant, but energy analysts express skepticism
Treasury Secretary Scott Bessent claims underground routes will render the chokepoint obsolete within two years, but experts warning of persistent supply vulnerabilities disagree.
The short version
- U.S. Treasury Secretary Scott Bessent stated that underground pipelines will handle 50% to 70% of regional energy exports within two years, rendering the Strait of Hormuz irrelevant.
- Energy analysts and the International Energy Agency dispute this timeline, projecting that new bypass routes will fall far short of pre-war export volumes and leave global markets vulnerable.
- Bypass infrastructure cannot accommodate liquefied natural gas exports, and alternative maritime routes like the Bab el-Mandeb remain exposed to regional conflicts.
Key facts
- U.S. Treasury Secretary Scott Bessent projected that 50% to 70% of energy exports usually sent through the Strait of Hormuz will shift to underground pipelines within two years.[NPR]
- The International Energy Agency characterized the drop in shipping following U.S. and Israeli military strikes on Iran in February as the largest energy supply disruption on record.[NPR]
- The United Arab Emirates plans to open a $3 billion pipeline expansion to Fujairah next year, but larger Saudi projects are expected to take several years to complete.[NPR]
- Energy experts estimate upcoming pipeline additions will carry only 10 million to 12 million barrels per day, compared to the 20 million barrels per day that passed through the strait prior to the war.[NPR]
- Liquefied natural gas cannot be transported through pipelines, leaving major exporters like Qatar reliant on maritime passage through the strait.[NPR]
What remains uncertain
- The exact volume of current vessel traffic through the Strait of Hormuz remains unverified, as ships are turning off AIS transponders and commercial satellite imagery in conflict zones has been restricted at the U.S. government's request.[NPR]
- It is disputed whether a U.S. naval blockade exercises complete control over the Strait of Hormuz or if Iranian forces retain the capacity to target alternative pipeline terminals and shipping routes.[NPR]