$60 billion in U.S.-Iraq agreements were signed Friday, centered on energy projects meant to create export routes that bypass the Strait of Hormuz during the U.S.-Iran war.
Chevron signed three deals, including one to fund a new pipeline export route, while Washington also backed Iraq and Syria's plan to rebuild a crude pipeline linking Basra to Turkey's Ceyhan and Syria's Baniyas port.
That corridor is projected to carry about 2 million barrels a day, but viable alternatives will take time—Goldman Sachs says pipelines in one country alone need at least 2.5 years to build.
Oil market pressure remains acute: West Texas crude rose nearly 5% Friday to $88 a barrel, versus about $67 before the war, after Iran repeatedly threatened to close Hormuz, which handled roughly 23 million barrels a day prewar.
By the end of 2028, seven regional pipelines under development could carry about 14 million barrels a day—roughly 60% of the volume that previously moved through Hormuz.
Will new pipelines through conflict zones secure oil flow, or just move the battlefield from the sea to the desert?
Is the U.S. backing of a controversial Iraqi PM a pragmatic move for energy security or a future geopolitical crisis in the making?
US-Iraq Sign $60 Billion Oil and Infrastructure Deals to Counter Global Energy Crisis and Bypass Hormuz
Overview
On July 17, 2026, the United States and Iraq signed $60 billion in agreements to address the urgent need for stable oil supplies and new export routes amid a volatile global energy landscape. This move comes as the US-Iran war, which began in February 2026, has severely disrupted oil markets, causing significant price swings and raising concerns about supply security. Before the conflict, oil prices were much lower, but the war pushed them up sharply. These deals aim to strengthen Iraq’s oil production and create alternative export pathways, helping to stabilize markets and reduce reliance on vulnerable routes.