Chevron is moving forward with plans to invest in Iraq’s energy sector, including signing preliminary agreements to develop two oil fields and joining a consortium investigating the possibility of constructing a pipeline linking Iraq’s oil-producing regions to the Syrian coast. The company is expected to formalize these initial deals on Friday, in line with broader efforts by Gulf states and Iraq to reduce reliance on the Strait of Hormuz amid heightened regional tensions.

The Strait of Hormuz, a critical chokepoint through which about 20% of the world’s oil previously flowed, has become a focal point of conflict as Iran seeks greater control over the passage, prompting a military response from the United States. In response, Gulf Arab countries and Iraq have accelerated investments in alternative export routes, including new pipelines, rail networks, and storage facilities, in a strategy likely to have lasting effects on regional energy infrastructure.

Iraq, the Middle East’s second-largest oil producer after Saudi Arabia, typically supplies around 4.5 million barrels daily—roughly 5% of the global total. However, ongoing conflict has significantly reduced its export volumes. Most of Iraq’s southern oil production currently depends on shipments through the Strait of Hormuz, while northern export options, mainly through Turkey’s Ceyhan terminal, remain limited, according to industry research firm Rystad Energy.

The upcoming agreements come amid a push by Iraqi Prime Minister Ali Al Zaidi to strengthen ties with the United States and attract foreign investment. Zaidi is scheduled to participate in a U.S.-Iraq Business Summit in Washington on Friday, where government officials including U.S. Energy Secretary Chris Wright are expected to oversee deals valued at up to $60 billion.

One of Chevron’s major projects under consideration involves reviving the pipeline from Kirkuk in northern Iraq to the Syrian Mediterranean port of Baniyas. This pipeline has been inactive for over 20 years, damaged during the 2003 U.S. invasion of Iraq. The consortium will conduct technical evaluations to decide if rebuilding the old pipeline or connecting to existing routes through Turkey is more feasible, according to a senior Chevron official, who emphasized that negotiations remain in early stages despite ongoing discussions with the Iraqi government for over a year.

In addition to pipeline plans, Chevron is pursuing stakes in two Iraqi oil fields: West Qurna 2 and Nasiriyah. West Qurna 2, located south of Basra, is one of the world’s largest onshore fields, producing around 460,000 barrels per day. Chevron entered exclusive negotiations with Iraq’s state-run Basra Oil shortly before the recent outbreak of conflict, following Iraq’s removal of Russian operator Lukoil from the field. Nasiriyah, a smaller field in the south, is also part of Chevron’s investment talks.

Zaidi’s outreach to Chevron included a visit to the company’s Houston headquarters on Thursday, where Chevron executives expressed willingness to support Iraq’s efforts to develop its energy resources. Separately, Zaidi met with U.S. President Donald Trump at the White House earlier this week during a visit aimed at securing economic cooperation. Trump highlighted the potential for significant new deals and job creation in both countries, linking enhanced oil production to American corporate involvement.

Zaidi, who assumed office earlier this year, had previously been a relatively unknown figure with no formal political experience. His bank was previously sanctioned by the U.S. Treasury over alleged connections to an Iran-linked militia leader. His rise has been closely tied to President Trump’s endorsement, contingent on curbing Iranian influence in Baghdad.