Middle East Conflict Drives Brent Crude Prices Above $100 Per Barrel

Construction costs are facing renewed pressure due to the escalation of the Middle East conflict. Brent crude oil prices have climbed above $100 per barrel for the first time since May, following a fresh escalation in the region.

The previous decline in oil prices had eased concerns over disruption in the Strait of Hormuz after a temporary ceasefire between the US and Iran. However, Houthi militia targeted oil tankers in the Red Sea, threatening another critical global shipping route.

Sam Parkin, senior economist at BCIS, warns that the latest developments have reintroduced uncertainty into the construction cost environment.

He notes that oil-derived products and energy-intensive materials such as aluminium, steel, cement, glass, and chemicals will likely face renewed cost pressure if higher energy and shipping costs persist. Existing supply contracts and manufacturing capacity may slow down how quickly these increased costs reach site level, but firms without stock or long-term procurement arrangements are more exposed.

BCIS polling found that 80% of construction professionals expect materials costs to rise over the next 12 months, while 59% believe the Middle East conflict is already affecting UK construction tender prices.