Iraq advances oil deals with US energy giant amid push to bypass Strait of Hormuz

Middle Eastern oil producers are accelerating efforts to reduce their dependence on the Strait of Hormuz, through which around 20% of the world's oil shipments passed before the recent conflict with Iran. Governments across the Gulf are investing billions of dollars in pipelines, rail links and energy storage infrastructure to create alternative export routes, a shift that analysts expect to become one of the lasting geopolitical consequences of the war.

Against this backdrop, US energy giant Chevron has strengthened its presence in Iraq, signing preliminary agreements this week to invest in two major oil projects while joining a consortium studying a new export pipeline linking Iraq's oil fields to Syria's Mediterranean coast, as Al Jazeera reported.

The agreements, signed on 17 July, form part of Iraq's broader strategy to deepen energy cooperation with the United States and expand its oil production while diversifying export routes away from the Strait of Hormuz.

Iraqi Prime Minister Ali al-Zaidi, who took office in May, visited Chevron's headquarters in Houston on 16 July during a five-day trip to the United States. The visit is expected to culminate in talks with US President Donald Trump.

Prime Minister al-Zaidi and Iraq's oil minister met with Chevron Vice Chairman Mark Nelson to discuss expanding the company's role in the country's energy sector.

"We appreciate the chance to meet with Iraqi leaders and talk about how our expertise in building large oil and gas projects throughout the world can support Iraq as it further develops its abundant energy resources," Chevron Upstream President Clay Neff said in a statement.

Oil fields

Chevron entered exclusive negotiations with Iraq in February to develop the West Qurna 2 oilfield, one of the world's largest producing fields with current output of around 460,000 barrels per day.

The Iraqi government nationalised the field earlier this year after seeking to avoid potential disruptions linked to US sanctions on Russia's Lukoil, which had previously operated the project.

The preliminary agreement signed this week is intended to advance commercial negotiations and pave the way for a final agreement under which Chevron would assume development of the field.

The company is also progressing plans for the Nassiriya oilfield project. Chevron and the Iraqi government signed an agreement in principle last August covering the development of four exploration blocks alongside additional producing fields.

Pipeline project aims to bypass Hormuz

Alongside the upstream investments, Chevron has joined a consortium exploring new export infrastructure designed to reduce Iraq's reliance on the Strait of Hormuz.

The consortium, which includes Chevron and Qatar's UCC, signed an agreement with Iraq's state-owned Basra Oil Company on 4 July to evaluate potential pipeline routes connecting Iraq's oil-producing regions with Syria's Mediterranean coast.

The proposed corridor would revive Iraq's access to western export routes at a time when regional producers are seeking greater resilience against geopolitical disruptions in the Gulf.

The initiative has received backing from Washington. A US State Department official said this week that the Trump administration supports efforts by Iraq and Syria to revive the Kirkuk-Baniyas pipeline, which has remained largely inactive since it was damaged during the 2003 US-led invasion of Iraq.

If completed, the project would provide Iraq with an alternative outlet for crude exports while reducing its dependence on one of the world's most strategically sensitive maritime chokepoints.

By Nazrin Sadigova