Housing costs to be affected by Iran war

Newsweek -   Several materials used in homebuilding—including steel, copper, aluminum and cement—could see price surges as a result of the war in Iran, according to a new report from Linesight, a global construction consultancy.

It all starts with the impact that the conflict is having on the Strait of Hormuz, where one fifth of the world’s oil normally transits. According to the International Energy Agency (IEA), a prolonged disruption of transport in the Strait of Hormuz could push the global oil market into deficit, with consequences spilling over the energy market alone—especially if the chokehold on the strait continues for months.

"Energy cost rises then pass through to quarrying, calcination, smelting and transport, making energy the primary channel from geopolitics to construction budgets," Linesight wrote in its report.

Among the materials most vulnerable to these dynamics is steel, which is both energy intensive and sensitive to logistics disruptions. Steel prices reached their peak in 2022 in response to a surge in crude oil prices, Linesight wrote, surging by 75 percent from May 2021 to May 2022 as oil prices increased by approximately 66 percent.