Tipsheet

Chevron Just Joined the Race to Bypass the Strait of Hormuz

Dmitri Bolt
Dmitri Bolt  |  July 17, 2026 2:15 PM

Chevron, the U.S. oil giant, is expected to sign a major memorandum of understanding with Iraq on Friday, joining a wave of investors pouring capital into two Iraqi oil fields. The goal: build infrastructure that could help move Iraqi crude without relying on the Strait of Hormuz. 

While the strait remains a strategic chokepoint and a source of serious leverage for Iran and other terrorist groups in the region, the free market is continuing to assemble its own solution, one that could render the strait increasingly obsolete.

Here's more from the Wall Street Journal:

The deals with Chevron are part of a broader push by new Iraqi Prime Minister Ali Al Zaidi to shore up investment from the U.S. The U.S. Chamber of Commerce is scheduled to host a U.S.-Iraq Business Summit on Friday in Washington with Zaidi, Energy Secretary Chris Wright and others where it says $60 billion in deals will be signed.

One of the options the Chevron consortium is considering is rebuilding the pipeline from Kirkuk in northern Iraq to the Syrian port of Baniyas on the Mediterranean Sea that has been shut for more than two decades, a senior Chevron official said. The pipeline was damaged during the U.S. invasion of Iraq in 2003.

The consortium plans to conduct technical studies to determine whether to build a new pipeline or update existing infrastructure that would connect with pipelines through Turkey, the Chevron executive said.

The deal comes after more than a year of negotiations. However, any real progress on improved oil infrastructure remains a long way off.

“We appreciate the chance to meet with Iraqi leaders and talk about how our expertise in building large oil-and-gas projects throughout the world can support Iraq as it further develops its abundant energy resources,” Clay Neff, president for upstream oil-and-gas pumping operations at Chevron, said. 

The move parallels efforts by several other Gulf countries, primarily Saudi Arabia and the United Arab Emirates, who are pursuing the same goal. By 2027, the world could see almost half of all pre-war Gulf oil exports bypassing the critical waterway entirely. By 2028, that share would reach 60 percent.