U.S. and Iraq Sign US$60 Billion in Deals to Expand Energy Export Routes

The United States and Iraq signed approximately US$60 billion worth of agreements and partnerships aimed at expanding energy infrastructure and developing alternative oil export routes that bypass the Strait of Hormuz, The Associated Press (AP) reported.

U.S. and Iraqi officials signed multibillion-dollar agreements intended to strengthen regional energy infrastructure. (Photo: David Herrera Flickr)

The agreements, signed at the U.S. Chamber of Commerce, also cover healthcare, communications, and infrastructure projects. While the energy agreements seek to reduce dependence on the Strait of Hormuz, it remains unclear when alternative export routes will become operational.

According to Goldman Sachs, constructing cross-border oil pipelines typically takes at least two and a half years, particularly when projects involve multiple countries.

The Strait of Hormuz carries roughly 20% of the world's oil supply, and repeated threats to close the waterway have contributed to heightened volatility in global energy markets.

West Texas Intermediate (WTI) crude subsequently rose nearly 5% to around US$88 per barrel, compared with approximately US$67 before the conflict began. Prices had briefly exceeded US$110 per barrel earlier in the conflict before retreating during a temporary ceasefire.

U.S. Ambassador to Turkey Thomas Barrack said the proposed pipeline network could eventually make the Strait of Hormuz "an afterthought."

The agreements followed a meeting in Houston between Iraqi Prime Minister Ali Falah al-Zaidi and executives from Chevron, during which the Iraqi leader encouraged the company to expand its investments in Iraq.