Announcement

Treasury Secretary Scott Bessent, speaking at the G20 summit on 1 September 2026, declared that the Strait of Hormuz will become a “worthless piece of water” within the next two years, signalling an aggressive U.S. strategy to economically isolate Iran.

Rationale and Production Data

Bessent attributed the projected obsolescence of the chokepoint to a surge in U.S. oil output that has risen by between 1.6 million and 2.2 million barrels per day since the inauguration of President Donald Trump. He argued that this increase will enable over‑land pipelines to fully bypass the strait within 24 months, removing Iran’s primary asymmetric military leverage.

Sanctions and Financial Measures

  • A “zero tolerance” policy was announced, targeting airline‑leasing firms that support Iranian aviation and promising sanctions against any that continue such facilitation.
  • The Treasury has already pinpointed offshore accounts in the British Virgin Islands that hold Iranian assets.
  • A new series of crackdowns on financial institutions deemed complicit is slated to commence within the next two weeks.
  • Bessent suggested that any seized Iranian funds could be redirected either to the Iranian populace or to compensate victims of terror.

International Backing

He cited unified backing from the European Union, the European Central Bank, the United Kingdom, the United Arab Emirates and Bahrain, and disclosed that the United States is conducting private, back‑channel talks with Beijing to obtain Chinese cooperation on the blockade.

Broader Economic Commentary

Turning to wider market dynamics, Bessent highlighted the recent dominance of the U.S. bond market and described a “Western Hemisphere economic renaissance” led by Argentina as a generational opportunity. Market tickers displayed at the time of the article showed crude oil WTI up 1.63 % against the US dollar, the US 10‑year Treasury yield up 0.27 %, the Argentine peso versus the US dollar down 0.26 %, and other indices moving modestly.

Publication Details

The article, authored by Louis Juricic for Reuters, was published on 1 September 2026 at 07:42 pm IST and updated two minutes later.