Anabelle Colaco
21 Jul 2026, 21:01 GMT+10
WASHINGTON, D.C.: The United States and Iraq signed about US$60 billion in agreements, including major energy projects aimed at creating alternative oil export routes to reduce reliance on the Strait of Hormuz as conflict involving Iran continues to disrupt global energy markets.
The agreements, signed at the U.S. Chamber of Commerce, also cover healthcare, communications and infrastructure, but the energy projects drew the most attention because they are intended to strengthen regional energy security.
The oil pipeline projects are designed to provide alternative export routes from Iraq through Syria and Turkey, though they are expected to take years to complete. Analysts at Goldman Sachs estimate that pipelines of this scale typically require at least two and a half years to build.
The Strait of Hormuz handles about one-fifth of the world's oil shipments. Iran has repeatedly threatened to close the strategic waterway since the U.S.-Iran war began on Feb. 28, contributing to sharp swings in global oil prices.
U.S. Ambassador to Turkey Thomas Barrack said the pipeline agreements would lead to a program "that will make the Strait of Hormuz an afterthought."
The agreements followed Iraqi Prime Minister Ali Falah al-Zaidi's meeting with Chevron executives in Houston, where he urged the U.S. energy company to expand its investments in Iraq.
Chevron signed three agreements with the Iraqi government. Jake Spiering, the company's president of corporate business development, said two deals would boost oil production, while another would support investment in "a pipeline that's going to create another export route out of Iraq to world markets. This is very important for energy security."
The U.S. State Department also welcomed an agreement between Iraq and Syria to rehabilitate the Iraq-Syria crude oil pipeline, describing it as a priority infrastructure project.
The planned pipeline would connect Iraq's southern oil hub of Basra with Haditha, then extend to Turkey's Ceyhan port and Syria's Mediterranean port of Baniyas. Iraqi officials say it is expected to carry about two million barrels of oil per day.
Goldman Sachs estimates that several pipeline projects under development across the region could eventually carry about 14 million barrels of oil per day by the end of 2028, reducing dependence on the Strait of Hormuz.
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