Oil Majors Eye Middle East Expansion
Major oil companies are pursuing investment opportunities in the Middle East despite the conflict between the United States and Iran, betting that access to abundant, inexpensive reserves can justify heightened security risks. Executives from Shell, BP, TotalEnergies, ConocoPhillips and Chevron expressed interest in expanding their regional investments this week, the Financial Times reported. Many are due to travel to Riyadh this weekend for the World Petroleum Congress.
Saudi Arabia and the United Arab Emirates represent attractive prospects because of their vast hydrocarbon resources and low production costs. Greater access would offer international operators opportunities to develop reserves capable of remaining commercially competitive when oil prices weaken. That prospect comes as Arab governments reconsider international partnerships and assess the financing and expertise needed to repair damaged facilities and build infrastructure after the war.
TotalEnergies chief executive Patrick Pouyanné argued that the region’s cost advantage remained compelling, while emphasising the need for alternative export routes around the Strait of Hormuz. His position reflects a growing industry concern: producing oil cheaply offers limited protection if shipments cannot reliably reach customers. Reuters separately reported this week that Kuwait Petroleum Corporation was discussing new pipelines with Saudi Arabia and the UAE, although responsibility for financing such projects remained contested. Its chief executive argued that importing countries also had a responsibility to contribute.
The investment appetite signals confidence in the region’s long-term resource base, but expressions of interest have yet to establish the scale or timing of new commitments. Commercial terms, security conditions and dependable export infrastructure will influence whether prospective projects proceed. For host governments, attracting international capital could support reconstruction and future production. For the companies, the calculation extends beyond extraction costs to the expense of protecting assets and moving supplies through a region where disruption has made transport resilience central to investment decisions.