Middle East Conflict Disrupts UK Construction Sector Amid Rising Energy Prices and Supply Chain Risks

The ongoing conflict in the Middle East, ignited by US-Israel operations against Iran, poses significant risks to the UK construction sector through supply chain disruptions and energy market volatility. The closure of the Strait of Hormuz, a critical oil and gas route, exacerbates these issues. Key industry associations, including the Association for Consultancy and Engineering and the Civil Engineering Contractors Association, express concerns over rising costs and project uncertainties. The Mineral Products Association urges government action to mitigate immediate economic impacts and support energy-intensive industries.

Published Mar 28, 2026

The conflict in the Middle East, initiated on 28 February by Operation Epic Fury, threatens the UK construction sector via supply chain disruptions and volatile energy markets. The closure of the Strait of Hormuz, which carries 20% of global oil and LNG, heightens these risks.

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Industry representatives from the Association for Consultancy and Engineering and the Civil Engineering Contractors Association report increased uncertainty and inflationary pressures affecting project confidence and costs. The Mineral Products Association calls for urgent government policy changes to alleviate cost pressures, including delaying fuel duty discounts and supporting energy-intensive industries. Updated forecasts predict a 14% increase in building costs over the next five years, reflecting the sector's vulnerability to geopolitical instability.