About 20 million barrels of petroleum liquids pass through the Strait of Hormuz every day. That is roughly 20% of global oil consumption moving through a waterway just 21 miles wide at its narrowest point. Iran sits on one side of it. That geography has given Tehran one of the most powerful pieces of economic leverage in the world.On Aug. 8, U.S. Treasury Secretary Scott Bessent sat down for an interview and said that leverage is about to disappear. And one oil major is already positioned at the center of the plan he described.What Scott Bessent said about the Strait of HormuzSpeaking with host Mark Curtis on 12 News, Treasury Secretary Scott Bessent was asked whether the Strait would ever return to the way it was before. He said no, and then went further.”The Strait is never going back to the way it was because the Iranians have used, or tried to use it, as a choke point,” Bessent said. “What we are going to see over the next two years, the Strait is going to become irrelevant. It is going to become just another body of water, and I would say that more than 50 or 70% of the energy that moves through the Strait now is going to go through underground pipelines,” The Mary Sue reported.More Oil & Gas:Iran de-escalation just hit energy stocksDrivers lose control over gas price squeezeGoldman sends a fresh warning to the oil marketAbout 20 million barrels of petroleum liquids crossed Hormuz in 2024. The EIA puts that at roughly 20% of global oil consumption. In early August, Brent crude slid more than 5% in a single session on news of possible Hormuz deal talks, then reversed on setbacks. Asian refiners were already looking for alternative supply routes. The waterway’s closure was not theoretical. It happened, as CNBC reported.Why Chevron is studying the Haditha-Baniyas pipelineChevron (CVX) is participating in feasibility studies for the Haditha-Baniyas pipeline. The route runs from Iraq’s oil network at Haditha to the Syrian port of Baniyas on the Mediterranean coast. Iraqi oil producers would have a second export option. They would not need to send barrels through the Persian Gulf and Hormuz.The Kirkuk-Baniyas pipeline ran through Syria to the Mediterranean decades ago, but it stopped operating. Haditha-Baniyas is a different proposal. It needs new studies, financing, security arrangements, and agreements between Iraq, Syria, and other parties.Chevron generated $33.9 billion in operating cash flow and $20.2 billion in adjusted free cash flow in 2025. It returned $27.1 billion to shareholders. Chevron’s financials do not depend on this pipeline. The project is an addition, not a foundation. Washington is actively pushing alternative Hormuz routes. Chevron is inside one of them.
Bessent’s broader argument is that a pipeline is permanent infrastructure, while a missile interceptor is a one-time expenditure.Tim/Getty Images
The gap between existing pipeline capacity and HormuzSaudi Arabia and the United Arab Emirates have about 4.7 million barrels per day of unused pipeline capacity that can bypass Hormuz. That sounds significant until you compare it to the 20 million barrels crossing the Strait every day. The gap is roughly 15 million barrels per day. Bessent’s claim that 50% to 70% of Hormuz traffic will move through pipelines represents an increase of 10 to 14 million barrels per day of new capacity that does not yet exist.One pipeline will not close that gap. Washington’s strategy requires a network of alternative routes. Saudi Arabia is expanding its East-West Petroline. The UAE has been routing more through its Fujairah pipeline. Iraq is studying overland corridors including Haditha-Baniyas. While each project adds capacity, none of them alone comes close to replacing Hormuz.Pipelines also carry their own risks. A route through Iraq and Syria could face missiles, drones, sabotage, and political instability. The current proposal requires cooperation between Iraq, Syria, and other regional stakeholders. Financing for large-scale infrastructure in a conflict zone is difficult to secure. Even projects that win approval can take years to build. Bessent’s two-year timeline is therefore ambitious.What Bessent’s Hormuz call means for Chevron stockBessent’s broader argument is that a pipeline is permanent infrastructure, while a missile interceptor is a one-time expenditure. The U.S. military has reportedly depleted portions of its missile inventories during the Iran conflict and after years of supporting Ukraine. Rebuilding those stockpiles takes time and money. That creates an additional reason for Washington to favor infrastructure over indefinite military protection of Hormuz.For Chevron investors, the Haditha-Baniyas study is not an imminent earnings catalyst. The project is preliminary and could face years of delays or never advance to construction. But if Washington genuinely shifts from defending Hormuz to building around it, Chevron’s role in one of the most significant proposed alternative routes puts it in a strategically relevant position.Bessent did not say one pipeline makes Hormuz irrelevant. He said a network of pipelines will. Chevron is already studying one of them.Related: Scott Bessent’s economy claim is raising eyebrows on Wall Street