U.S. says pipelines will make Strait of Hormuz irrelevant. Energy experts disagree

Pipeline Ambitions Collide With Geopolitical Reality as Hormuz Remains Central to Global Energy

Ecorescuezone.com – The disruption to oil and gas flows through the Strait of Hormuz following the February U.S.-Israeli military campaign against Iran has produced what the International Energy Agency describes as the largest energy supply shock in recorded history. In response, Washington has layered new economic sanctions onto the crisis, betting that Gulf producers can rapidly construct alternative export corridors to render the narrow waterway functionally obsolete. Energy market specialists, however, view that timeline as optimistic to the point of fantasy, and they warn that consumers should brace for sustained price pressure well into the next decade.

Treasury’s Bold Forecast

Treasury Secretary Scott Bessent laid out the administration’s vision in an interview with an NBC affiliate earlier this month, declaring that the strait’s strategic importance would evaporate within roughly twenty-four months. He projected that between half and seventy percent of the energy commodities normally transiting the corridor would instead flow through buried pipeline networks.

“What we are going to see over the next two years — the strait is going to become irrelevant. It is going to become just another body of water.”

The statement landed with particular force because the Strait of Hormuz, at its narrowest point roughly thirty-three kilometres wide, has carried approximately one-fifth of the world’s traded oil since the 1970s. For decades it has been the single most consequential chokepoint in global energy logistics, funneling exports from Saudi Arabia, Iraq, Kuwait, Qatar, the United Arab Emirates, and Iran itself into international shipping lanes.

What the Pipelines Actually Deliver

The United Arab Emirates has committed to a roughly three-billion-dollar expansion of its pipeline system terminating at the port of Fujairah, with commissioning expected next year. That project would add meaningful capacity for Emirati crude and condensate. Beyond Abu Dhabi, however, the picture dims considerably. A larger Saudi pipeline expansion — the kind of infrastructure that could genuinely shift tens of millions of barrels away from the strait — faces a construction and permitting timeline stretching several more years, according to assessments circulated by the International Energy Agency, whose member states include the United States and major Gulf producers.

Rebecca Schulz, the IEA’s senior oil market analyst, quantified the shortfall: even after every major bypass project reaches full operation, the volume of crude still requiring passage through Hormuz to restore Gulf exports to pre-war volumes could top ten million barrels per day. That figure represents approximately half of what moved through the strait before the conflict began in late February.

“And even when these big projects finish, the amount of oil that will still need to pass through the Strait for total Gulf exports to return to pre-war levels could exceed 10 million barrels per day — around half of prewar levels.”

Why “Irrelevant” Overshoots the Mark

Robert McNally, who served as senior director for international energy on the National Security Council under President George W. Bush, called Bessent’s language an overstatement that misreads both engineering constraints and military realities.

“Irrelevant is way too strong and overstated.”

McNally stressed that the physical architecture of Gulf energy infrastructure was designed around Hormuz from the outset. Most export terminals, loading jetties, and pipeline terminations in the region face the strait directly. Redirecting flows means not merely laying new pipe but reconfiguring terminal operations, tanker scheduling, and insurance frameworks — a process that unfolds over years, not months.

“When we talk about energy flows, the Strait of Hormuz is the most relevant chokepoint on the planet. Even if regional producers are able to build pipelines and options to direct flows around Hormuz, the benefit, and there will be a benefit to that, will not make Hormuz irrelevant.”

McNally added a military dimension: Iran has repeatedly demonstrated the capability to strike redirected routes and expanded terminal sites. Any new infrastructure, no matter how far it sits from the strait’s mouth, remains a target in a conflict where Tehran’s stated objective is to extract payment for its exports.

The Wider Chokepoint Problem

Hormuz is not the only vulnerability. The Bab el-Mandeb Strait, the narrow passage between the Arabian Peninsula and the Horn of Africa that forms the southern gateway to the Red Sea, has traditionally handled roughly five percent of global energy exports and serves as one of the few remaining alternate corridors for Gulf crude, particularly Saudi barrels. Yemen’s Iran-aligned Houthi rebels have launched repeated attacks on commercial shipping in that waterway, compounding the disruption.

Saudi Arabia has backed Yemen’s internationally recognized government against the Houthis. After a Saudi strike on a Houthi-controlled runway at Sanaa’s international airport, the Houthis retaliated with attacks aimed at Saudi territory, underscoring how quickly a regional flashpoint can cascade into broader energy-market instability.

“In essence, while bypass routes for oil are helpful for ensuring supply through periods of instability, they cannot substitute for the need for a durable long-term regional settlement to the conflict. All the more so as the bypass routes remain vulnerable to attack as we’ve seen with recent Red Sea troubles.”

A Structural Constraint, Not a Temporary Glitch

David Goldwyn, a former U.S. State Department special envoy and now president of Goldwyn Global Strategies, framed the situation in structural terms. The pipelines coming online over the coming years, he noted, would collectively add only about ten to twelve million barrels per day of alternative capacity — well short of the twenty million barrels per day that transited the strait before the war began.

“I think that we have to accept that this crisis in the Strait of Hormuz, the constraints on exports are going to be a somewhat permanent feature for the next few years. The dynamics of the conflict, which are that Iran wants to get paid for exports, is not going to change. The U.S. inability to achieve a military outcome that would force freedom of navigation in the strait also seems very unlikely.”

For consumers in Europe, Asia, and the Americas, the practical implication is straightforward: the premium embedded in crude and refined-product prices is unlikely to compress quickly. Pipeline construction schedules, insurance premiums on Gulf shipping, and the unresolved political standoff between Washington and Tehran all point toward a prolonged period of elevated energy costs. The administration’s sanctions package, while tightening Iran’s fiscal position, does not accelerate a single day of pipeline construction or shorten a single month of tanker transit risk. Until a durable regional settlement restores predictable navigation rights, the strait — far from becoming “just another body of water” — will remain the defining variable in global energy pricing.