If you’re planning to build a home, develop property, or even price out a project over the next year or two, there’s a factor most people aren’t thinking about right now.
It isn’t lumber.
It isn’t labor.
It’s geopolitics.
Instability in the Middle East can affect energy markets, shipping routes, and industrial supply chains. And those three things eventually show up in the cost of building materials.
Not overnight. But over time.
Let me explain how.
Energy Prices Are the Hidden Driver of Construction Costs
When conflict disrupts energy supply or shipping routes, oil and natural gas prices tend to react quickly.
That matters more for construction than most people realize.
According to the U.S. Energy Information Administration, the Strait of Hormuz carries roughly 20 percent of the world’s oil and natural gas shipments, making it one of the most critical energy transit routes on the planet (U.S. Energy Information Administration, 2025).
When instability affects that region, energy prices can move — and construction runs on energy.
Everything from excavation equipment to delivery trucks to manufacturing plants depends on fuel.
Fuel Costs Affect Every Step of a Construction Project
Construction doesn’t just use fuel on the jobsite.
Fuel is embedded in the entire supply chain.
Diesel powers heavy equipment, trucking fleets, and freight logistics. When diesel rises, it affects the cost of transporting nearly every building material.
Earlier this year, the Associated General Contractors of America reported that diesel prices jumped more than 20 percent, pushing construction input prices higher and forcing some developers to delay projects (Associated General Contractors of America, 2026).
So when energy prices climb, the impact spreads quickly through the building industry.
Petroleum Is Also Inside Many Building Materials
Another piece people miss is how many construction products are actually petroleum-based.
According to the Energy Information Administration, petroleum derivatives are used in materials such as:
- asphalt roofing
- insulation
- plastic plumbing pipe
- waterproofing systems
- sealants and adhesives
(U.S. Energy Information Administration, 2025).
So when oil prices move, the impact isn’t just transportation.
It can eventually show up in the price of materials themselves.
Shipping Disruptions Add Another Layer of Cost
Conflict doesn’t only affect energy markets. It also changes how goods move around the world.
When shipping routes become riskier, vessels reroute, insurance costs increase, and freight prices rise.
Freight market data shows that some global shipping lanes have already seen noticeable increases in freight rates as tensions escalate (Freightos, 2026).
Those higher transportation costs eventually make their way into the price of imported materials and equipment used in construction.
Construction Costs Were Already Climbing
All of this is happening on top of a construction industry that was already facing higher input costs.
The National Association of Home Builders reports that construction input prices have been rising roughly 4 percent year over year, even before recent geopolitical pressure (National Association of Home Builders, 2026).
That means the system doesn’t have much cushion for additional shocks.
What This Actually Means for People Planning to Build
This doesn’t mean construction costs will spike tomorrow.
But it does mean volatility is back in the equation.
If instability continues to affect global energy markets and shipping routes, builders and developers could see:
- shorter price lock periods from suppliers
- more fuel surcharges
- material cost adjustments mid-project
- tighter margins on fixed bids
In practical terms, anyone planning to build should expect more variability in project budgets than we saw in calmer years.
The Bottom Line
Most of the time, global conflicts feel far removed from the housing market here in the Mountain West.
But over time, energy markets and supply chains tend to work their way into construction costs.
Middle East instability is one of those situations where the effects may appear slowly — not all at once.
If you’re planning a project in the next year or two, it’s smart to build a little extra breathing room into your budget and timeline.
That way you’re prepared if material costs shift again.
And if you want a straight answer about how market conditions might affect your project, I’m always happy to give you a practical gut-check.
Buying. Selling. Investing. It all begins with Swett Equity.
References
Associated General Contractors of America. (2026, March 18). Soaring fuel and metals costs send prices higher for construction materials.
https://www.agc.org/news/2026/03/18/soaring-fuel-and-metals-costs-send-prices-higher-construction-materials-february-iran-war-makes
Freightos. (2026, April 7). Freight rates elevated but mostly level as war stretches on.
https://www.freightos.com/freight-industry-updates/weekly-freight-updates/freight-rates-elevated-but-mostly-level-as-war-stretches-on-april-07-2026-update/
National Association of Home Builders. (2026). Building material price growth.
https://www.nahb.org/blog/2026/01/building-material-price-growth
Reuters. (2026, April 6). War in Middle East could slow growth and increase inflation, IMF says.
https://www.reuters.com/world/middle-east/war-middle-east-will-lead-slower-growth-higher-inflation-imf-chief-tells-reuters-2026-04-06/
U.S. Energy Information Administration. (2025). World oil transit chokepoints.
https://www.eia.gov/international/content/analysis/special_topics/World_Oil_Transit_Chokepoints/
