US Oil Firms Sign $60B Iraq Deals to Build Hormuz Alternative Routes

American companies signed approximately $60 billion in agreements with the Iraqi government Friday, including major energy deals aimed at developing pipeline routes that could eventually bypass the Strait of Hormuz — the waterway that Iran has repeatedly sought to close since the US-Iran war began in February.

Chevron Leads Energy Investment Push

The agreements, signed at the US Chamber of Commerce in Washington, span several industries including healthcare, communications, and infrastructure, but the centerpiece was a set of oil investment deals intended to reduce the world’s dependence on the Strait of Hormuz for Persian Gulf energy exports.

Chevron signed three separate agreements with the Iraqi government. Two focus on expanding oil production inside Iraq, while a third involves direct pipeline investment. “Investing in a pipeline that’s going to create another export route out of Iraq to world markets — this is very important for energy security,” said Jake Spiering, Chevron’s president of corporate business development.

The US Iraq oil deals Hormuz alternative pipeline signings followed a meeting Thursday between Iraqi Prime Minister Ali Falah al-Zaidi and Chevron executives in Houston, where al-Zaidi urged the company to expand and accelerate its commitments to Iraq.

Iraq-Syria Pipeline Project Gets US Backing

The State Department also welcomed a separate agreement between Iraq and Syria to rehabilitate and reconstruct the Iraq-Syria crude oil pipeline, describing it as a priority infrastructure project. “The United States welcomes the engagement of a US-led international consortium to execute the technical and financial aspects of this project,” the department said.

The planned pipeline would run from Iraq’s southern oil hub at Basra to Haditha in western Iraq, then onward to the Ceyhan port in Turkey and Syria’s Baniyas port on the Mediterranean coast. Iraqi officials say the pipeline could carry approximately 2 million barrels of oil per day.

In the interim, some oil has already been trucked overland from Iraq into Syria and shipped to European markets through Baniyas — a more costly and less efficient alternative that became viable after a key Iraq-Syria border crossing reopened in April following more than a decade of closure.

How Much Could Alternative Routes Carry?

Goldman Sachs estimated this week that seven pipeline projects currently under development in the region could, by the end of 2028, carry approximately 60% of the oil currently moving through the Strait of Hormuz — roughly 14 million barrels per day. Before the war, the strait carried approximately 23 million barrels daily.

However, the timeline for meaningful relief is long. Goldman estimated pipelines in a single country alone take at least two and a half years to build. Pipelines spanning two or more nations, as several of these projects require, would take considerably longer.

US Ambassador to Turkey Thomas Barrack said the pipeline agreements could eventually lead to a program “that will make the Strait of Hormuz an afterthought” — an ambitious claim that analysts said would require sustained investment and regional stability to achieve.

Oil Prices Climb as Hormuz Tensions Persist

West Texas Intermediate crude rose nearly 5% Friday to approximately $88 per barrel — up sharply from around $67 before the war began in February. Oil had spiked above $110 per barrel in early April before falling back when a ceasefire was reached, and has since climbed again as the conflict has resumed. Iran’s repeated attempts to close or restrict traffic through the strait have caused sharp volatility in energy markets worldwide.