Chevron reportedly plans to sign early-stage deals Friday to invest in Iraqi oil fields and consider the construction of a pipeline connecting Iraq’s reservoirs to the Syrian coast as oil majors seek workarounds for the Strait of Hormuz.
As the US and Iran have renewed strikes in the Middle East, major oil producers – including Iraq – have been desperately searching for alternatives to the strait, a vital maritime route for 20% of the world’s oil supplies that has been effectively blockaded during the war.
Nations across the Persian Gulf have poured billions of dollars into new pipelines, rail corridors and energy storage hubs to skirt around the strait – and now Chevron is considering getting in on the action, according to the Wall Street Journal.
The Houston, Tex.-based oil major is considering rebuilding a pipeline from Kirkuk, Iraq, to the Syrian port of Baniyas on the Mediterranean Sea, a senior Chevron official told the outlet.
An oil pipeline tracing along that route has been shut down for more than two decades after it was badly damaged in 2003 during the US’ invasion of Iraq.
Chevron will join a consortium of investors that plan to conduct studies to determine whether they should build a new pipeline in its place or update existing infrastructure, according to the exec.
The company has been in talks with the Iraqi government for 12 to 18 months and the preliminary deals are a “long ways from the finish line,” he said.
On Thursday, Iraqi Prime Minister Ali Al Zaidi visited Chevron’s headquarters in downtown Houston to meet a group led by Chevron Vice Chairman Mark Nelson.
The prime minister met with President Trump in the Oval Office on Tuesday.
“The United States is facilitating conversation between Iraq and Syria on future energy development projects and supports the growing diplomatic relationship between the two countries,” a senior Trump administration official told The Post.
Chevron confirmed it is discussing possible investments in two Iraqi oil fields, the Nasiriyah and West-Qurna-2.
“Chevron looks forward to sharing its expertise in successfully developing oil and gas projects to support Iraq in further developing its energy resources,” a spokesperson told The Post.
The company declined to comment on reported talks about a pipeline, saying it does not comment on third-party statements or commercial matters.
The news comes as strikes ramped up in the Middle East this week after President Trump announced a ceasefire with Iran was “over,” reversing declines in gasoline prices.
On Thursday, American diesel prices rose above $5 a gallon again, hitting an average price of $5.01, according to AAA.
Regular gasoline prices hit $3.94 a gallon Thursday – below its peak of $4.56 in the spring, but on the incline again and about 10 cents higher than this time last week.
As the on-and-off blockade of the Strait of Hormuz has caused the worst-ever global energy supply disruption, experts have warned it could take many months for gasoline to fall below the $3 level – and that’s only if a permanent peace deal to keep the strait open is reached.
Trump said this week that the strait is reopened for all nations except Iran, but safety concerns remain as Tehran is still able to strike at commercial shipping vessels in the waterway.
Elevated energy prices have already started to weigh on households, but it has yet to be seen whether they will have a lasting inflationary effect – as economists warn higher fuel prices could hike costs for food, apparel, furniture and virtually anything that travels via truck.
Economic data released this week indicated higher energy prices have yet to fully bleed through to consumer goods – but Federal Reserve officials warned one good inflation report isn’t enough to dispel concerns.
The White House did not immediately respond to The Post’s request for comment.