Higher energy costs raise the price of almost every material

The biggest transmission channel is oil and fuel prices. The conflict has disrupted shipping through the Strait of Hormuz, which normally carries about 20% of global oil supply, causing crude prices to surge.

Energy costs feed directly into construction materials because many are extremely energy-intensive to produce, including:

  • Cement and concrete
  • Steel
  • Glass
  • Asphalt
  • Brick
  • Plastics and insulation

At the same time, diesel prices for trucking and equipment are rising, which increases transportation costs across the supply chain.

Effect:
  • Higher material production costs
  • Higher shipping and trucking costs
  • Increased jobsite operating costs

Disruptions to global metals supply (especially aluminum)

The Middle East is a meaningful exporter of primary aluminum, which is widely used in U.S. construction (window systems, curtain walls, roofing, electrical components).

Because of the conflict:

  • Aluminum smelters in Bahrain and Qatar have suspended shipments
  • The U.S. relies heavily on imported primary aluminum
  • Buyers are paying higher premiums to secure supply
Effect:

Higher prices for aluminum-based products, such as:

  • Windows and curtain walls
  • Roofing systems
  • Electrical conduit and components
  • HVAC equipment

Shipping disruptions increase imported material costs

When ships avoid conflict zones such as the Strait of Hormuz or the Red Sea, they must take longer routes, increasing transit times and fuel consumption.

Shipping disruptions currently include:

  • halted container services
  • Port congestion in the Gulf
  • rerouting around Africa
  • increased insurance costs for vessels
  • For construction, this affects imports such as:
  • structural steel
  • rebar
  • mechanical equipment
  • stone and tile
  • fixtures and electrical equipment
Effect:
  • longer lead times
  • higher freight rates
  • more supply uncertainty

Petrochemical materials get more expensive

Many construction materials are derived from oil or natural gas feedstocks, including:

  • PVC pipe
  • insulation foam
  • roofing membranes
  • sealants and coatings
  • synthetic flooring

Since energy prices are rising sharply due to the conflict, these petrochemical materials also tend to become more expensive.

What this means for U.S. construction projects

Short-term (0–6 months)
  • Price spikes in metals and petrochemical materials
  • Longer lead times for imported components
  • More volatile bids from contractors and suppliers
Medium-term (6–18 months)
  • Increased project budgets
  • More escalation clauses in contracts
  • Potential project delays if materials become scarce
Sectors most affected
  • Commercial buildings (glass, aluminum, steel systems)
  • Infrastructure (asphalt, steel, cement)
  • Energy projects (pipes, valves, equipment)

Bottom line

The Iran conflict does not directly cut off U.S. construction material supply, but it raises costs and delays delivery through three mechanisms:

  • Energy price spikes → higher production costs
  • Metal supply disruptions → higher aluminum and steel prices
  • Shipping rerouting and insurance costs → higher import prices and delays

The result is construction cost inflation and increased project risk, especially if the Strait of Hormuz remains disrupted for an extended period.