The agreement between the US and Iran to bring an end to conflict has begun to ease concerns around oil supply and shipping routes through the Strait of Hormuz. However, a return to normal will take time, and uncertainty remains over where oil prices will settle and how markets will respond in the months ahead, according to Currie & Brown, a world-leading project and cost management and advisory services firm.
For the construction industry, the implications extend far beyond fuel costs. Energy prices influence the manufacture and transportation of key materials, including steel, copper and aluminium, as well as supplier pricing, procurement strategies and project delivery, stated the expert in its new research into the impact of oil price volatility on construction markets around the world.
Drawing on historical market data, commodity trends and project cost intelligence, Currie & Brown’s research models a range of potential outcomes under different oil price scenarios, it stated.
The global analysis shows that the impact of oil price volatility is unlikely to be felt evenly. In India, steel prices could rise by up to 18%, driven by strong domestic demand and reliance on imports.
Singapore, by contrast, could see steel costs increase by 4.3%, partly because major projects have already secured materials through early procurement. The findings highlight how the same market shock can produce very different outcomes across regions, said the expert.
In the UAE and Saudi Arabia, steel prices could increase by up to 15.9% by September under a higher oil price scenario. Copper could rise by 5.4% and aluminium by as much as 10.5%.
Demand for these materials remains strong, driven by giga-projects, airport expansion, hospitality developments and the rapid growth of data centre construction. Data centres are particularly exposed because of their intensive use of copper and mechanical, electrical and plumbing (MEP) systems, while hospitality projects depend on globally sourced fit-out materials, furnishings and specialist equipment.-TradeArabia News Service
