Chevron considers Iraqi pipeline

Chevron is preparing to sign preliminary accords with the Iraqi government on Friday, to advance investments in major oil fields and explore a pipeline project designed to bypass the Strait of Hormuz. The move comes as the United States and Iran engage in renewed strikes in the Middle East and the strait, which handles approximately 20% of global oil supplies, has faced effective blockades during the conflict.

The Houston-based oil major is considering the reconstruction of a 500-mile pipeline connecting Kirkuk, Iraq, to the Syrian port of Baniyas on the Mediterranean Sea. The route has been largely defunct for more than two decades after sustaining heavy damage during the 2003 US invasion of Iraq. A senior Chevron official told the Wall Street Journal that the company will join a consortium of investors to study whether to update existing infrastructure or build a new pipeline entirely.

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This effort aligns with a US-backed proposal called ARAM Express, which envisions a multidirectional overland network for petrochemicals, gas, and oil originating in the Gulf and extending toward the Mediterranean and Red Seas. According to a policy memo reviewed by Fox News Digital, the plan seeks broad international participation from Asian and European buyers to secure long-term supply resilience.

The diplomatic push for the pipeline is being facilitated by Special Presidential Envoy Thomas Barrack. The US State Department has publicly supported these efforts to limit Iran's leverage over global oil flows. A senior Trump administration official told the New York Post that the US is facilitating conversations between Iraq and Syria on future energy projects to support a growing diplomatic relationship between the two nations.

On Thursday, Iraqi Prime Minister Ali Al-Zaidi visited Chevron’s headquarters in Houston to meet with a delegation led by Vice Chairman Mark Nelson. This visit followed a Tuesday meeting between Al-Zaidi and President Donald Trump in the Oval Office. Al-Zaidi informed executives that Iraq is prepared to offer investment incentives, infrastructure support, and approvals to accelerate projects including refining, crude production, and technology transfer.

Beyond the pipeline, Chevron is negotiating investments in two key Iraqi fields:

• West Qurna-2: One of the world's largest fields with recoverable reserves estimated at 13–14 billion barrels. It currently produces between 460,000 and 480,000 barrels per day. Iraq nationalized the field earlier in 2026 from Russia's Lukoil. Iraqi officials indicate Chevron's involvement could increase output to between 750,000 and 800,000 barrels per day.
• Nasiriyah: A project covering exploration and production blocks in Dhi Qar province.

The upcoming agreements on Friday are expected to be non-binding memorandums of understanding (MOUs) intended to facilitate technical evaluations and data sharing. A senior company executive noted that while these show commitment, commercial terms are still a ways from the finish line.

The energy crisis has also impacted US consumers; AAA reported that American diesel prices rose to an average of $5.01 per gallon on Thursday, while regular gasoline hit $3.94 per gallon.

Industry leaders view the bypass as a necessity. TotalEnergies CEO Patrick Pouyanné stated at a Paris conference that investing in pipelines to bypass the strait is an absolute priority. He noted that if predecessors could build such a pipeline 100 years ago, the industry should be capable of doing it again today.

Other Gulf nations have already implemented similar strategies. Saudi Arabia uses its East-West pipeline to move crude to the Red Sea port of Yanbu, while the UAE utilizes a pipeline to Fujairah. However, analysts warn that countries like Qatar and Kuwait remain heavily dependent on the strait.

Following the Friday signings, the US Chamber of Commerce is sponsoring a US-Iraq Business Summit in Washington where further investment commitments totaling billions of dollars are expected to be announced.