U.S. companies signed roughly $60 billion in agreements and partnerships with the Iraqi government on Friday, including deals aimed at building new export routes for oil that would bypass the Strait of Hormuz — one of the world's most critical, and currently most contested, energy chokepoints.
What Was Signed
The agreements were signed at the U.S. Chamber of Commerce in Washington, coinciding with the U.S.-Iraq Business Summit, where Iraqi Prime Minister Ali al-Zaidi spoke alongside American business leaders. Beyond energy, the roughly $60 billion in deals spanned multiple sectors, including healthcare, communications, and infrastructure. Chevron alone signed three separate agreements with the Iraqi government: two focused on boosting oil production, and a third centered on what the company described as a genuinely new export corridor. "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.
Why Iraq, and Why Now
Iraq occupies a uniquely precarious position in the ongoing U.S.-Iran conflict: it's home to both Iran-backed militias and U.S. military bases, putting it squarely in the crosshairs since the war between the U.S., Israel, and Iran began on February 28. At the same time, Iraq's oil wealth and geography make it a natural candidate for building alternative infrastructure that could reduce the region's overwhelming reliance on the Strait of Hormuz, through which roughly a fifth of the world's oil has historically flowed. With that route now regularly disrupted by the ongoing conflict, West Texas crude prices have climbed sharply — rising nearly 5% Friday afternoon alone to $88 a barrel, up from around $67 before the war began, and as high as $110 earlier in April at the conflict's peak.
How the Alternative Routes Already Work — And Their Limits
With Hormuz shipments dramatically curtailed by the war, some Iraqi oil has already begun moving via an improvised overland route: trucked from Iraq into Syria and shipped onward to European markets through Syria's Baniyas port. A key border crossing between northern Iraq and Syria, closed for more than a decade, reopened in April specifically to support this kind of alternative energy export corridor. Notably, Syria has largely managed to stay out of the broader regional conflict, and Damascus — still recovering from its own 14-year civil war — has actively marketed itself as a stable transit alternative for energy shipments passing through the region. Officials acknowledge, however, that this overland route is considerably less efficient and more expensive than shipping directly through the strait, making it a stopgap rather than a long-term replacement.
The Bigger Pipeline Ambition
Friday's Chevron pipeline deal is part of a broader regional buildout. According to a Goldman Sachs analysis released earlier in the week, seven separate pipeline projects currently under development across the region could, by the end of 2028, carry roughly 60% of the oil volume that historically moved through the Strait of Hormuz — an estimated 14 million barrels per day, compared to the roughly 23 million barrels per day that flowed through Hormuz before the war began. Goldman cautioned that pipeline construction in just a single country typically takes at least two and a half years, and these particular projects would need to cross two or more nations, meaning any meaningful capacity increase remains years away rather than an immediate fix.
Why It Matters
The scale and timing of Friday's agreements underscore how seriously governments and energy companies are now treating the prospect of a durably disrupted Strait of Hormuz, rather than assuming the current conflict is a temporary interruption to business as usual. Even as the pipeline and infrastructure investments signal genuine long-term commitment to diversifying regional oil export routes, the years-long construction timelines mean the Strait of Hormuz will likely remain the dominant — and most vulnerable — corridor for Gulf oil exports for the foreseeable future.
What's Next
With Chevron's pipeline investment now formalized and Goldman Sachs projecting a meaningful, though partial, capacity shift away from Hormuz by 2028, attention will turn to how quickly these projects move from agreement to construction, and whether additional companies and governments follow with similar investments. In the meantime, the overland Iraq-Syria route and other stopgap measures are likely to remain the primary near-term alternative as the broader region continues navigating the fallout from the ongoing conflict.