U.S. Treasury Secretary Scott Bessent said the Strait of Hormuz could become bypassable within two years as oil is shifted to overland pipelines. He also indicated that Washington could announce new banking sanctions on Iran this week or next, with support from several international partners.
Speaking at a G20 fireside chat, Bessent said the U.S. 3-3-3 energy plan is focused on oil-equivalent supply. He said U.S. daily oil production has increased by between 1.6 million and 2.2 million barrels per day since President Donald Trump took office.
Iran sanctions and energy routes
Bessent said oil could increasingly move through land-based pipelines instead of the Strait of Hormuz. He described the waterway as potentially becoming “worthless waters” once alternative routes are established and said it would be “bypassable” within two years.
On Iran, Bessent said 85% to 90% of Iranian factories could be rebuilt. He also said Iran may possess the world’s third-largest energy resources and that the country has an opportunity to re-enter the global system.
Bessent said the U.S. Treasury may announce banking sanctions against Iran this week or next. He said the measures had strong backing from the European Union, European Central Bank, United Kingdom, United Arab Emirates and Bahrain. He also said Washington would target aviation leasing companies linked to Iran and monitor Iranian aircraft lessors.
The Treasury secretary said the U.S. has zero tolerance for Iran and wants to economically restrict its development. He added that funds seized from the Iranian people could be returned to them and that Iranian funds could be used to help victims of terrorism. Bessent also said Treasury is aware of accounts in the British Virgin Islands linked to Iran.
Separately, ECB Governing Council member Joachim Nagel criticised the U.S. for selling euros to support the Japanese yen without prior coordination with European partners. Japan intervened in foreign exchange markets in late July, while Bessent confirmed in early August that the U.S. had assisted against disorderly yen moves. Nagel said advance consultation would have been preferable and that European officials were unhappy about the lack of coordination.
