Energy deals set to dominate $60bn US-Iraq business summit

Energy deals are poised to take center stage at a high-profile US-Iraq business summit expected to generate up to $60 billion in commercial contracts, as Iraq seeks to strengthen economic ties with the United States and revitalize its battered energy sector. The summit, scheduled for Friday, follows weeks of diplomatic engagement between Iraqi Prime Minister Ali Al Zaidi and American oil giants, including ConocoPhillips and Chevron, who are anticipated to formalize major investments in Iraq’s oil industry. A key agreement already reached involves ConocoPhillips acquiring a 42 percent stake in BP Energy Company of Kirkuk Limited, aimed at developing four producing oilfields in northern Iraq. This move signals growing international interest in tapping into Iraq’s vast reserves despite ongoing regional tensions. Meanwhile, Chevron is expected to ink deals related to the West Qurna 2 and Nasiriyah oilfields in southern Iraq. These fields currently produce approximately 460,000 and 90,000 barrels of oil daily, respectively. Additionally, Chevron is reportedly considering joining a group of investors to explore the revival of the Kirkuk-Baniyas pipeline, a historic route connecting northern Iraq to a Mediterranean port in Syria. Iraq’s energy sector has suffered significantly due to the ongoing conflict involving Iran, which has effectively blocked the Strait of Hormuz, a critical artery for global oil transport. Before the conflict, about 20 percent of the world’s oil supply moved through the strait. Recent data shows that Iraq’s oil exports dropped sharply, from around 4.2 million barrels per day in February to just 1.45 million barrels per day in May, according to OPEC figures. This decline underscores the urgency for Iraq to secure alternative export routes and diversify its energy partnerships. Prime Minister Ali Al Zaidi arrived in Houston, Texas, earlier this week to engage directly with top executives from Chevron and ExxonMobil, reflecting his administration’s push to attract foreign investment. During these meetings, Al Zaidi emphasized the need for increased production capacity and improved refining infrastructure, which could help stabilize Iraq’s economy amid the current crisis. His visit coincided with broader efforts to align Iraq more closely with U.S. interests, particularly following the rejection of his predecessor, Nouri Al Maliki, by the Trump administration over alleged ties to Iran and its allies. Despite securing U.S. support, Al Zaidi faces challenges stemming from Iraq’s deep-rooted relationships with Iran. He recently participated in the funeral procession of Ayatollah Ali Khamenei, Iran’s supreme leader, highlighting the complex geopolitical landscape within which he operates. Nevertheless, the resumption of U.S. financial access to Iraq, after a suspension meant to pressure Baghdad into forming a government less influenced by Iran, has opened new avenues for cooperation. The U.S. maintains control over Iraq’s oil revenues, which are stored in a special account at the Federal Reserve Bank of New York. This arrangement allows Washington to exert influence over Baghdad’s fiscal policies and ensures compliance with conditions tied to the restoration of financial ties. As the summit approaches, expectations remain high for tangible outcomes that could reshape the future of U.S.-Iraq energy collaboration. In addition to oil-related discussions, the Iraqi delegation met with engineering and technology firm KBR to explore opportunities in oil production and investment. These interactions reflect a broader strategy to modernize Iraq’s energy infrastructure and reduce dependency on traditional export routes. With the U.S. Energy Secretary and a senior U.S. envoy to Syria and Iraq also expected to attend the summit, the event promises to be a pivotal moment in shaping the trajectory of bilateral relations.