Middle East Conflict Drives Oil Prices Above $100, Threatening Construction Costs
Construction costs in the UK may experience renewed pressure due to rising oil prices. Brent crude, the international benchmark for oil prices, surpassed $100 per barrel on Thursday following a fresh escalation of conflict in the Middle East.
The price increase comes after temporary ceasefire arrangements between the US and Iran had eased concerns over disruption in global shipping routes. However, Houthi militia targeted oil tankers in the Red Sea, threatening another critical route.
Sam Parkin, senior economist at BCIS, stated that the latest developments reintroduced uncertainty into the construction cost environment.
'Brent crude prices have climbed again amid fresh escalation in the Middle East,' he said. 'They had previously eased to around $80 per barrel as tanker traffic through the Strait of Hormuz partially recovered.'
The BCIS polling conducted in early July found that 80% of construction professionals expected materials costs to rise over the next 12 months.