An agreement between the US and Iran has driven down oil prices, which rose noticeably during the conflict.
Construction inputs have faced inflation because of higher oil prices, including materials that require energy-intensive production processes like steel and aluminum.
The agreement is a good early sign, but recovery will depend on the restarting of oil and trade flows.
The tentative agreement between the United States and Iran has pushed oil prices lower, as the prospect of increased transit through the Strait of Hormuz eases significant strain on global trade.
Since the announcement, both Brent crude and West Texas Intermediate have fallen to their lowest levels in more than three months.
Lower energy prices should ease inflation across gasoline, diesel, and freight, trimming several construction input costs.
Should the deal hold, that decline should filter through energy-intensive materials such as aluminum and steel over time, offering further relief on material costs.
Steel and aluminum have seen significant price increases over the course of the conflict with Iran, driven largely by higher energy costs. Both metals are energy-intensive to produce, leaving them especially exposed to recent oil price spikes.
Bureau of Labor Statistics data show the Producer Price Index for steel mill products in May was 7.2% higher than in February, the last pre-conflict reading. The increase has been even sharper for aluminum, up 11.2% since the start of the war and 48.7% since May 2025.
A cessation of hostilities and the resumption of trade should bring welcome relief for several construction inputs. That relief may be slow to arrive, however, as uncertainty lingers.
Despite the immediate drop in oil prices, significant headwinds could weaken or slow any meaningful relief. Most notably, the conflict shuttered or damaged oil and material production facilities across the region, suggesting a period of restarting and rebuilding capacity before physical goods begin moving again.
This also assumes that the Strait remains open and shipping restarts. Over the weekend, Iran announced that it would once again close the Strait, which dropped the daily number of vessels transiting the Strait from 26 to 5, according to Kpler.
That slow restart could be further complicated by depleted inventories. The Wall Street Journal recently reported that the US Strategic Petroleum Reserve (SPR) has drawn down at least 75 million barrels over the course of the war, leaving the reserve at its lowest level since the mid-1980s.
An end to the conflict with Iran would restart global trade and could rein in some of the cost inflation pressuring the construction industry. Immediate declines in oil prices should lower fuel and shipping costs, easing the price of several key construction inputs, including jobsite fuel use, energy-intensive materials, and overall transportation.
Relief may be slow to arrive, however. Infrastructure and production across the Middle East were shuttered or damaged during the conflict, and physical output will take time to restart.
The US also drew down significant volumes of its oil reserves to stabilize prices during the fighting, creating a potential inventory challenge as flows are restored.
[Read Record Draws on Oil Inventory Deepen Market Disruption]
Falling oil prices and recovering trade volume should ease the recent inflation in construction inputs, though the timing will hinge on the pace of restored production and shipping. A quick recovery could pull prices lower, while a slow one could hold them well above pre-conflict norms.
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