U.S.-Iran Conflict Impacts Middle East Construction Projects, Leading to Arbitration Risks
The ongoing conflict between the U.S. and Iran is significantly affecting construction projects in the Middle East, particularly in terms of procurement, scheduling, cash flow, and claims. The Strait of Hormuz, a critical shipping route, is central to these disruptions, impacting freight, insurance, fuel supplies, and shipping schedules. The conflict has led to increased costs and delays in construction projects, with many companies facing challenges due to shipping disruptions and war-risk premiums. These issues are compounded by existing pressures in the Middle East construction market, which was already experiencing high activity levels and cost pressures before the conflict escalated.