U.S. companies are taking a first step toward helping rebuild the Middle East when the war in Iran ends.
Their engagement makes sense, though it pays to be cautious as the war continues. Iran has made it clear any American assets in the area could be at risk, even after the war.
Iraq, the second-largest regional oil producer after Saudi Arabia, is at the center of American efforts this week to rebuild the region. Iraq needs some help -- its economy has struggled because much of its oil exports have been blocked by the Iran war.
Iraqi Prime Minister Ali Al Zaidi is in the U.S., and attended a business summit at the U.S. Chamber of Commerce on Friday to announce tens of billions of dollars worth of potential U.S. investments in the country.
That will include large energy investments, which are at various stages of development. Chevron and ConocoPhillips are both looking to Iraq as a potential source of production growth.
Conoco announced on Friday that it is buying a 42% interest in BP's oilfields around Kirkuk in northern Iraq, and plans to redevelop the area with an eye to boosting production there. Financial terms weren't disclosed, and Conoco said it doesn't expect it will need to contribute significant capital to the joint venture in charge of the project.
Chevron expects to sign two preliminary development deals for fields in southern Iraq. It will also consider helping build a pipeline that could send oil north to the Syrian coast, instead of through the Strait of Hormuz, which Iran intends to control after the war.
Oil from southern Iraq could be fed through reconstructed pipelines to the Mediterranean or potentially through Turkey, one senior Chevron official said.
Chevron would replace Russia's Lukoil at one of the fields, known as West Qurna 2, which produces about 460,000 barrels of oil a day -- among the region's largest oil fields. That field, and the other one the company is considering, now use the Strait of Hormuz as their export route. If a pipeline is built, Chevron would be part of a consortium doing it, instead of taking all the risk itself.
This kind of investment isn't new for the company. Chevron has been producing oil in areas that other big oil companies have avoided, including Venezuela. It is a strategy that comes with risk. But in the oil business, it is often as much of a risk to avoid uncertain areas as it is to drill in them. Exxon got in early to the prolific oilfields offshore Guyana, while Chevron had to buy in later at a higher price.
Chevron is still a "long ways from the finish line today" in terms of committing to these Iraq deals, a senior company official said. That's probably a relief to investors.
Write to Avi Salzman at avi.salzman@barrons.com
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(END) Dow Jones Newswires
July 17, 2026 14:46 ET (18:46 GMT)
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