Chevron bets on Middle East bypass pipelines
The discussion highlighted that Chevron is exploring a multi-billion dollar pipeline deal with Iraq to bypass the volatile Strait of Hormuz.
The argument
The guest argued that the deal signals that major oil companies expect a prolonged Middle East conflict with permanent changes to global oil flows. While a pipeline through Syria could be repaired in a few years, it would only carry about 2 million of the 20 million barrels that flow daily through the Strait of Hormuz.
The thesis, stress-tested
✓ What validates it
- ✓Formalization of the pre-deal commitment into a binding construction agreement between Chevron and Iraq
- ✓Rehabilitation progress on the offline Syrian pipeline
▸ Risks discussed
- ▸High complexity involving negotiations with multiple foreign governments
- ▸Operating in a highly politically unstable region
- ▸High capital expenditure with uncertain cost-sharing agreements
Hear it yourself
"Daigle says if all goes well, the pipeline could be running in a handful of years, though it won't totally solve the oil logistics problem. 20,000,000 barrels pass through the Strait Of Hormuz each day when it's fully open. Daigle says this pipeline might carry 2,000,000."
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