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United States Treasury Secretary Scott Bessent dismissed the importance of the Strait of Hormuz on Tuesday, saying the crucial waterway for Persian Gulf energy that’s been controlled by Iran during the recent conflict will get bypassed by oil pipelines.
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“That will be bypassed in two years,” Bessent said in a fireside chat with Larry Kudlow on the sidelines of a gathering of global finance chiefs in Asheville, N.C. “In two years, the Strait of Hormuz will be like a worthless piece of water.”
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Bessent’s comments come amid a fresh round of hostilities between the U.S. and Iran, with tit-for-tat strikes between the two countries on Monday. Two tankers attempting to exit the Strait of Hormuz were struck by projectiles late Monday, maritime security consultant Marisks said.
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The Treasury Department has taken a more central role in recent weeks in the conflict, with Bessent announcing plans last week to expand sanctions on financial institutions and other entities that still do business with Iran. The U.S. moved against United Arab Emirates branches of Egypt’s second largest bank, Banque Misr, last week, but Bessent said Tuesday the U.S. didn’t want to sanction the main bank itself.
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“We did not sanction them because we did not want to go back to the Egyptian parent,” Bessent said of Banque Misr. The Treasury has said that the Emirati branches have done US$1.8 billion of business with Iran in the last two years.
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Bessent added that the U.S. will “probably” announce the sanctioning of another bank this week and a further one next week. The U.S. is now also looking into targeting aircraft leasing companies as part of its effort to economically isolate Iran, he said.
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The U.S. has so far not publicly moved against China, which imports more than 90 per cent of Iranian oil and has so far ignored the calls to sever financial ties with the Islamic Republic. Bessent defended the U.S.’s current stance, adding that he has had private discussions with China on Iran at the G20.
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“When everyone says, ‘Well, sanctions don’t work,’ I can tell you, sanctions plus a blockade work,” Bessent said. “We are burying the head of the Iranian snake. The snake doesn’t know it’s dead yet, but it will stop wiggling when the sun goes down.”
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