Chevron Looks to Iraq & Taco Bell Under Pressure

**SPEAKER_1** (0:00)
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**Ann Berry** (0:27)
The Hollywood saga continues. That's as a judge presses pause on the Paramount-Warner Brothers mega-merger. We have the latest on what could be a costly injunction.
Taco Bell in the middle of a food safety scare. Consumers are nervous, but Wall Street has been here before. We break it all down. And Chevron. We explore why the US company just signed a deal doubling down on energy out of the Middle East. For Monday, July 20th, it's Brew Markets Daily, and I'm Ann Berry.
More market details to come. But first, Chevron shaking up the oil markets with a significant new move into Iraq. On Friday, the Energy OG market cap over $375 billion signed a new preliminary agreement with the Iraqi government to develop the massive West Kourna 2 and Nasseria oil fields. West Kourna 2 already produces about 460,000 barrels of oil per day, and it's one of the largest producing oil fields in the world. Well, Chevron entered exclusive negotiations on West Kourna 2 earlier this year. Interestingly, that's after Iraq had reclaimed the project from Russian energy company, Lug Oil, amid its concerns about US sanctions. Chevron is also evaluating pipeline routes that could carry Iraqi crude through Syria to Turkey to the Mediterranean, giving Iraq an alternative to shipping through the Strait of Hormuz and representing a meaningful investment into new export infrastructure. Well, months of instability in the Middle East and repeated concerns about the security of the Strait of Hormuz have renewed interest in export routes that bypass one of the world's most important oil choke points. Just today, Iran's Houthi allies declared a maritime embargo against Saudi Arabia, escalating the threat to the oil market after repeated threats to close the Bab al-Mandeb Strait.
That strait connects the Red Sea to the Gulf of Aden and to global markets, another important choke point for commercial ships. Well, Saudi Arabia has diverted millions of barrels of oil daily through a pipeline to an export terminal on the Red Sea. Volume, by the way, that's offered a critical mitigant to beclades and the shortages that have been coming out as a result of the hits on the Strait of Hormuz. A closure of Bab al-Mandeb would block in those much needed barrels. All of this means that Iraq has an opportunity to position itself as an attractive strategic destination for Western investment, to expand production capacity and diversify how oil reaches global markets. And in addition to the Chevron deal, ConocoPhillips would also push into Iraq by acquiring a substantial stake in BP's Kirkuk operations, all together representing $60 billion of new activity in the country.
Well, this caught our eye because despite the conflict in the Middle East, when you might think investors would shy away from the region, the Chevron deal actually signals that major oil companies still see the Middle East essential to future global energy supplies, even in the face of years of investment flowing to other places like to US shale and to international production zones such as those in Guyana and offshore Brazil. Well, the deal notably strengthens economic ties also between Washington, DC and Baghdad at a time when Iraq is balancing relationships across the United States, Gulf Arab states, but also Iran and China. Well, lots going up here, and Chevron's reaction to all this pretty interesting for shareholders. That stock up about 2 percent on Friday, hot off the news, hitting just over 187 bucks. Going up again, another one and a quarter percent as the turmoil continues in the region. We're going to keep on watching. Well, coming up in a moment, we look at lettuce and survey the market fallout from the foodborne illnesses making headlines. But first, a few highlights from the day's trading session, kicking it all off with earnings.

**John Creteau** (4:16)
That's right, shares in Domino's Pizza, ticker DPZ, are up around 2% today after the company reported quarterly revenue that topped Wall Street estimates. And the bulk of that increase came from the company's supply chain business. That's the part of Domino's that sells pizza ingredients like dough, cheese and toppings to its more than 7000 franchise stores across the United States.

**Ann Berry** (4:35)
So that revenue beat can be attributed to the chain opening new locations in the recent quarter, along with a rise in the price of ingredients. The restaurants themselves, though, underperformed the US same store sales, that magic metric, seeing their slowest growth in five quarters. Well, despite today's gains, Domino's stock still down more than 23% this year.