The Iran War, Fuel Prices, and the Case for Energy Efficient Homes

To the SBA community,

By now you've felt it.

Diesel up. Freight quotes coming back higher than the last one. Suppliers talking about lead times like they're reading tea leaves. The conflict in Iran has rattled global oil markets, and we're all working out what it means for our businesses in real time.

Nobody has a clean answer right now. But I think it's worth taking a few minutes to look squarely at what we're dealing with, and more importantly, what it means for the work we do.

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1. The fuel problem hits builders harder than most

Here's the reality of our cost model: construction is energy intensive. Our excavators, our concrete trucks, our deliveries - these machines are not yet electric. They run on diesel. And every time there's a significant spike in oil prices, we wear it before our clients do, and long before it shows up in anyone's formal cost estimates.

Right now, fuel surcharges are being added quietly across freight and logistics. Some of our members are already seeing 8 to 15% increases on delivered material costs, almost overnight. That's before we factor in any flow-on to the manufactured products themselves.

If you haven't reviewed your pricing in the last sixty days, do it now. Not in a panic, but with clear eyes.

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2. Supply chain uncertainty is back, and this time it's geopolitical

The COVID disruption was a volume problem. Too much demand, not enough supply. We adapted.

This is different. This is a geopolitical disruption, which means the timeline is genuinely unpredictable. Nobody knows how long the conflict lasts, what it does to shipping lanes, or what happens to oil if the situation escalates further.

What does that mean practically? Lead times on imported products need to be treated as estimates, not guarantees. If you're pricing a project right now that relies on a specific European product or imported system, build in contingency. Not just cost contingency, programme contingency. Talk to your clients early about this. They can handle uncertainty when it's explained clearly and honestly. What they can't handle is being surprised six months into a build.

We've said it before and we'll say it again: the relationship you have with your client before a problem hits is what determines how you both come out the other side. Get ahead of it.

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3. The answer is the energy efficiency of our homes

Let me be very clear about this: the homes we build are not just part of the response to this crisis. They are the response to this crisis.

Every high-performance home we deliver, properly insulated, airtight, thermally designed, running on clean electricity, is a home that has broken its dependence on fossil fuel volatility. Not just for now, while oil markets are in chaos, but for the next fifty years. While everyone else is watching the fuel price ticker, the people living in our homes are not.

That is extraordinary. And right now, it matters more than it ever has.

Our work as sustainable builders has never been more important. The rest of the construction industry is largely building homes that will be expensive to heat, expensive to cool, and fully exposed to every energy price shock that comes down the line. We're building homes that are insulated from all of that, literally and figuratively.

This is not a time to back away from high-performance building. It's the single strongest argument for it we've ever had.

When a client says they might need to value manage some of this, your job right now is to be clear about which decisions are actually value and which ones just look like savings today but cost them more for the next thirty years. The building fabric, the insulation, the airtightness, the glazing performance, that is not where you cut. That is the part that pays dividends every single day the home is occupied.

Don't trade away the building fabric to hit a short-term number. Those decisions compound in the wrong direction for decades.

4. What we're doing as the SBA

We're keeping a close eye on this and will share updates as the picture becomes clearer.

In the coming weeks we'll be putting together a resource on how to have the pricing and programme conversation with clients in the current climate. Not a script, but some plain-spoken guidance from builders who've navigated situations like this before.

We're also talking to some of our supplier partners about lead time realities and which product categories are most exposed. We'll share what we learn.

And if you're already navigating something specific, please reach out. One of the best things about this community is that someone's usually been there before. Don't sit on a problem alone when you've got a network of builders who've seen a version of it.

There's no clean resolution to this briefing, because there's no clean resolution to what's happening in the world right now. But we built this alliance because we believe in doing things properly, even when it's hard. Especially when it's hard.

The builders who come through this well won't be the ones who panicked, cut corners, or chased the cheapest option. They'll be the ones who stayed clear-headed, communicated honestly with their clients, and kept building homes worth building.

That's what we're here for. Stay in touch.

Simon Clark
President,
Sustainable Builders Alliance