by Philip Giraldi, The Unz Review:
When U.S. Treasury Secretary Scott Bessent told an interviewer this weekend that the Strait of Hormuz would “become irrelevant” within two years — with more than half the energy now crossing it rerouted through underground pipelines — he was indulging a pipe dream. Bessent fails to grasp that Iran’s ability to use the Strait of Hormuz as geopolitical leverage is not going to vanish if the Gulf arabs quickly build oil pipelines. It is true that capital hates chokepoints, and Gulf producers are indeed racing to build around one. Saudi Arabia is expanding its East-West Petroline, the UAE has leaned harder on its Fujairah bypass, and Iraq is dusting off long-dormant overland export corridors. Chevron is even studying a revived Haditha–Baniyas line from Iraq to the Syrian Mediterranean.
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Although Bessent‘s oil pipeline proposal sounded like a nifty way to neuter Iran, he fails to grasp the true economic importance of the Persian Gulf and the leverage that Iran will continue to have for years to come. Bessent’s framing treats Hormuz as an oil problem, and a pipeline network — however ambitious — solves an oil problem. But Hormuz is not merely the world’s most important oil chokepoint. It is the sole maritime exit for a cluster of specialized commodities that cannot be pumped through a pipe, cannot be quickly re-sourced elsewhere, and whose disruption is already inflicting measurable economic damage across food, semiconductors, and heavy industry. Building a crude bypass and declaring the strait “irrelevant” mistakes one throughput for all of them.
The evidence for that is not hypothetical. It is the record of the past five months.
The oil bypass math is already the easy part — and it still doesn’t close
Start with the commodity the pipelines are meant to address. Even here the substitution is incomplete. Roughly 20 million barrels per day of crude, condensate, and products normally transit Hormuz — about a fifth of global petroleum consumption. Existing bypass capacity totals somewhere around 4.7 million barrels per day. Closing that gap requires not one flagship pipeline but an entire redundant network, built through active or recently active conflict zones, over a period of years. Bessent’s own two-year horizon is optimistic against that backdrop, and it is the most favorable case, because crude is the one Hormuz cargo that pipelines are actually designed to carry.
Everything else produced in the Gulf are not cargo that can be carried by a pipeline, and these are critically important to the global economy.
LNG: No pipe runs from Ras Laffan to Tokyo
About a fifth of the world’s liquefied natural gas trade moves through Hormuz, overwhelmingly from Qatar, the second-largest LNG exporter on earth. When Iranian strikes damaged Qatar’s Ras Laffan complex — the single largest LNG export facility in the world — and QatarEnergy declared force majeure in early March, roughly 10 billion cubic feet per day of supply, about 20% of globally traded LNG, went offline. Kpler tanker data showed no laden LNG vessel crossing the strait for nearly two months.
The consequences landed fast and far from the Gulf. The World Bank’s natural gas price index jumped 24% in a single month. Europe’s benchmark is now projected to climb roughly 25% across 2026, because LNG frequently sets the marginal price there; Asia, which takes the overwhelming majority of Qatari cargoes, was hit hardest as buyers scrambled to replace contracted deliveries on the spot market.
Here is the part a pipeline cannot fix: LNG has no overland route out of Qatar. Liquefied gas is a seaborne product by definition — you liquefy it precisely because you cannot pipe it across oceans to Japan, South Korea, or India. And the one producer large enough to plug the gap, the United States, cannot. New American liquefaction terminals take years and billions to build; the EIA expected U.S. exports to rise by only a small fraction of the missing Qatari volumes, with meaningful new capacity trickling in through late 2026 at best. A crude bypass does nothing for the LNG buyer in Osaka. There is no bypass to build.
Urea and ammonia: the fertilizer shock that reaches every farm
The Gulf is not just an energy hub. It is one of the planet’s great fertilizer factories, and Hormuz is how those fertilizers reach the fields that depend on them. The Middle East supplies close to a quarter of global urea exports; by some measures roughly a third of world seaborne fertilizer trade was put at risk when the strait closed. Iran halted ammonia production; Qatar suspended urea, ammonia, and sulphur output after the Ras Laffan damage.
