- India’s construction sector remains most exposed to oil price volatility despite Middle East agreement
- New Currie & Brown research shows India could experience the highest construction cost increases among the markets analysed, with data centre projects rising by up to 13% and hotel projects by up to 12% under higher oil price scenarios.
- Data centre project costs could rise up to 8.5% in the US, 6.8% in the UK and 5.5% in Thailand. Hotels could see increases of up to 9.5% in the Middle East, 6.3% in Malaysia and 12% in India.
- Agreement between the US and Iran has eased immediate concerns, but uncertainty remains over how markets, supply chains and construction costs will respond.
London, 24June 2026: Currie & Brown, a world-leading project management, cost management and advisory services firm, has published new research into the impact of oil price volatility on construction markets around the world.
The agreement between the US and Iran to bring an end to conflict has begun to ease concerns around oil supply and shipping routes through the Strait of Hormuz. However, a return to normal will take time, and uncertainty remains over where oil prices will settle and how markets will respond in the months ahead.
For the construction industry, the implications extend far beyond fuel costs. Energy prices influence the manufacture and transportation of key materials, including steel, copper and aluminium, as well as supplier pricing, procurement strategies and project delivery. Drawing on historical market data, commodity trends and project cost intelligence, Currie & Brown’s research models a range of potential outcomes under different oil price scenarios.
The analysis shows that the effects are unlikely to be felt evenly. Some markets, sectors and supply chains are more sensitive than others. Under higher oil price scenarios, for example, data centre construction costs in India could increase by up to 13%, compared with up to 4.2% in Singapore. Hotel projects show a similar pattern, with forecast cost increases of up to 12% in India, while costs in Singapore are expected to rise by up to 3.7%.
Those differences are not just financial. They influence the choices organisations need to make. In data centres, where speed to market remains critical, developers may need to look again at procurement, lead times and programme certainty. In hospitality, owners and investors may need to decide where investment will best protect long-term asset value, guest experience and operational performance. Currie & Brown explores these sector-specific considerations in dedicated perspectives on data centre and hotel construction.
All of this uncertainty comes at a time when many organisations are making significant investment and delivery decisions. With demand remaining strong across many sectors, waiting for complete clarity is rarely an option.
Alan Manuel, Group Chief Executive Officer at Currie & Brown, said:
“Construction projects don’t stop every time markets become volatile. Investment decisions still need to be made, contracts still need to be signed, and programmes still need to move forward.
“Disruption is becoming a more regular feature of the operating environment. Whether it is geopolitics, inflation, trade policy or supply chain disruption, market conditions frequently change quickly and often with little warning.
“The organisations best placed to succeed are not those trying to predict every disruption. They are the ones taking the time to understand the risks and build flexibility into their plans and delivery models from the outset.”
The US-Iran agreement may have reduced immediate pressure on energy markets, but it is unlikely to be the last unexpected event to affect construction this year, or next. Market shocks rarely arrive with warning. The challenge for construction leaders is not preparing for a specific event. It is creating projects, programmes and strategies with real flexibility that can respond to change without losing momentum.
Satyakumar Shetty, Chief Operating Officer, India, Currie & Brown, said:
“India is seeing significant investment in digital infrastructure, making cost certainty more important than ever. While easing tensions in the Middle East are encouraging, uncertainty around energy prices and supply chains remains. For data centre developers, early procurement, informed commercial decision-making and proactive risk management will be essential to maintaining programme certainty and protecting project budgets.”
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Currie & Brown is a world-leading project management, cost management and advisory services firm. We help clients deliver with certainty across every sector and stage of the project lifecycle.
From early strategy to final delivery, we bring clarity and confidence to complex decisions. Our role is to ensure that buildings and infrastructure are well planned, future-ready, and built to perform.
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Research Methodology
This research examines the relationship between oil price movements and construction costs by comparing historical crude oil prices with key construction material cost indices. All datasets were indexed to a common baseline to assess relative movements over time.
To estimate potential impacts in the current market, 2022 was used as a reference period due to similarly elevated oil prices. Historical material cost responses from that period were used to inform indicative ranges. Findings are directional and should not be considered forecasts, as material prices are influenced by multiple factors.
Material-level impacts were translated into sector-level cost implications using typical cost breakdowns for data centre and hotel projects derived from proprietary historical project data. Material price movements were weighted according to their share of total project costs and aggregated to estimate the potential effect on overall construction costs for each sector.
