Saudi Arabia and Kuwait: Partners Who Set the PriceThin moat

Chevron (CVX) — moat facet

About a sixth of Chevron's output comes from OPEC+ countries, the same governments whose decisions set the oil price.

Some of Chevron's partners are also the institutions that set the price of its product. Chevron produces in the Partitioned Zone between Saudi Arabia and Kuwait, under a concession that runs to 20461, and about 17 percent of its net oil-equivalent production in the first six months of 2026 "occurred in the OPEC+ member countries"2.

Chevron earnings by quarter, with Brent in the label ($bn)$2.49bnQ2 2025, Brent $68$12.07bnQ2 2026, Brent $104Chevron Q2 2026 earnings release
The conflict that curtailed output raised the price of everything else.

That is an unusual kind of competitor. OPEC+ governments are rivals in the sense that their barrels and Chevron's sell into the same market. They are hosts in the sense that Chevron's barrels in their countries are produced on their terms. And they are price-setters in the sense that a decision by the group to add or cut supply moves Brent, which moves Chevron's earnings more than anything Chevron does.

The Partitioned Zone produced 65 thousand barrels a day for Chevron in 20253. It was curtailed in both quarters of 2026: the second-quarter release says international upstream production was held back by "curtailments in the Partitioned Zone between Saudi Arabia and Kuwait due to the Middle East conflict"4. The same conflict helped lift Brent to $104 in the quarter5.

That is the relationship in one quarter: the region that cost Chevron volume raised the price of every other barrel it sold. Chevron's earnings were $12,072 million in the second quarter of 2026, against $2,490 million a year earlier6.

The curtailments were not confined to the Partitioned Zone. The first quarter of 2026 also brought curtailments in Israel7, and the 10-Q names CPChem assets in Saudi Arabia and Qatar8. The same region sets the price and interrupts the supply.

There is no moat against a competitor that controls the price. Chevron's defence is to keep costs low enough to survive the group's decisions, not to influence them. The share of production inside OPEC+ countries, 17 percent in the first half of 20269, is the exposure to watch; the heads of agreement in Iraq described on the Future Bets pages would raise it.

Moat trajectory: Narrowing

Partitioned Zone curtailed in 2026; Iraq talks would add OPEC+ exposure.

The number that tests this moat
Reported
Partitioned Zone net production
65 MBOED (2025)

Output inside a region where supply decisions and conflicts set the price; further curtailments would show up here.

Source: Chevron Form 10-K, FY2025 ↗
References
  1. ReportedChevron produces in the Partitioned Zone between Saudi Arabia and Kuwait, under a concession that runs to 2046, and about 17 percent of its net oil-equivalent production in the first six months of 2026 "occurred in the OPEC+ member countries".
    Chevron Form 10-K for fiscal 2025 - Items 1 and 2: upstream operations, reserves, concessions and employees. — FY2025 · publ. 24 February 2026 · source ↗
  2. ReportedChevron produces in the Partitioned Zone between Saudi Arabia and Kuwait, under a concession that runs to 2046, and about 17 percent of its net oil-equivalent production in the first six months of 2026 "occurred in the OPEC+ member countries".
    Chevron Form 10-Q for the quarter ended 30 June 2026 - share repurchases, the Middle East conflict, Venezuela, OPEC+ exposure and litigation. — Q2 2026 · publ. 6 August 2026 · source ↗
  3. ReportedThe Partitioned Zone produced 65 thousand barrels a day for Chevron in 2025.
    Chevron Form 10-K for fiscal 2025 - Items 1 and 2: upstream operations, reserves, concessions and employees. — FY2025 · publ. 24 February 2026 · source ↗
  4. ReportedIt was curtailed in both quarters of 2026: the second-quarter release says international upstream production was held back by "curtailments in the Partitioned Zone between Saudi Arabia and Kuwait due to the Middle East conflict".
    Chevron second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - operations: production, refining, realisations, curtailments and business events. — Q2 2026 · publ. 31 July 2026 · source ↗
  5. ReportedThe same conflict helped lift Brent to $104 in the quarter.
    Chevron second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - financial results: earnings by segment, Brent, return on capital employed, cash flow and debt. — Q2 2026 · publ. 31 July 2026 · source ↗
  6. ReportedChevron's earnings were $12,072 million in the second quarter of 2026, against $2,490 million a year earlier.
    Chevron second-quarter 2026 earnings release, Form 8-K exhibit 99.1 - financial results: earnings by segment, Brent, return on capital employed, cash flow and debt. — Q2 2026 · publ. 31 July 2026 · source ↗
  7. ReportedThe first quarter of 2026 also brought curtailments in Israel, and the 10-Q names CPChem assets in Saudi Arabia and Qatar.
    Chevron first-quarter 2026 earnings release, Form 8-K exhibit 99.1. — Q1 2026 · publ. 1 May 2026 · source ↗
  8. ReportedThe first quarter of 2026 also brought curtailments in Israel, and the 10-Q names CPChem assets in Saudi Arabia and Qatar.
    Chevron Form 10-Q for the quarter ended 30 June 2026 - share repurchases, the Middle East conflict, Venezuela, OPEC+ exposure and litigation. — Q2 2026 · publ. 6 August 2026 · source ↗
  9. ReportedThe share of production inside OPEC+ countries, 17 percent in the first half of 2026, is the exposure to watch; the heads of agreement in Iraq described on the Future Bets pages would raise it.
    Chevron Form 10-Q for the quarter ended 30 June 2026 - share repurchases, the Middle East conflict, Venezuela, OPEC+ exposure and litigation. — Q2 2026 · publ. 6 August 2026 · source ↗
Sources
Generated September 25, 2026